#FDIC Restricts Banks from Using Ethereum#
Hot Topic Overview
Overview
The Federal Deposit Insurance Corporation (FDIC) is taking a cautious approach to banks using public blockchains like Ethereum, requiring banks to undergo a new review process before using them. This news comes from a trove of unredacted crypto-related communications between the FDIC and its member banks obtained by Coinbase through a Freedom of Information Act request. The FDIC appears to be unhappy with banks choosing public blockchains over private permissioned networks, citing the decentralized and transparent nature of public blockchains as a risk. Additionally, the FDIC has asked member banks to cease implementing services related to buying and selling Bitcoin and has instructed member banks to "pause all activities related to crypto assets."
Ace Hot Topic Analysis
Analysis
The Federal Deposit Insurance Corporation (FDIC) is cautious about banks using public blockchains like Ethereum and requires member banks to undergo more stringent scrutiny before using them. According to documents obtained by Coinbase through a Freedom of Information Act request, the FDIC sent a letter to a New York bank in March 2022 expressing concerns about the bank's plan to launch a "bank digital deposit" program on a public blockchain. The FDIC appears to favor banks using private permissioned networks over public blockchains, as the decentralized and permissionless nature of public blockchains results in activities being completely transparent and uncontrollable by third parties. The FDIC believes that launching products on public blockchains requires more rigorous scrutiny and has asked member banks to pause all activities related to crypto assets, including buying and selling Bitcoin. This incident suggests that the FDIC is wary of the risks associated with banks using public blockchains and could potentially hinder banks' innovation in the crypto space.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
FDIC discourages member banks from using public blockchains such as Ethereum, citing the risks associated with their decentralized and public nature.
FDIC prefers to support member banks using private permissioned networks, believing they offer greater control.
FDIC has implemented stricter review processes for member banks launching products on public blockchains.
FDIC has instructed member banks to pause activities related to crypto assets, including the buying and selling of Bitcoin.