#FDIC Restricts Banks from Using Ethereum#
Hot Topic Overview
Overview
The Federal Deposit Insurance Corporation (FDIC) is cautious about banks using public blockchains like Ethereum, requiring them to undergo more stringent scrutiny before using them. According to documents obtained by Coinbase through a Freedom of Information Act request, the FDIC believes the decentralized and transparent nature of public blockchains poses risks and encourages banks to use private permissioned networks. The FDIC also requires banks to cease 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 banks to undergo more stringent scrutiny 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 documents reveal that in March 2022, the FDIC sent a letter to a New York bank expressing concerns about its plan to launch a "bank digital deposit" program on a public blockchain. The FDIC believes that the decentralized and transparent nature of public blockchains poses risks and recommends banks use private permissioned networks instead. 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." The FDIC's stance indicates its concerns about the security, compliance, and risk management capabilities of banks using public blockchains and its desire to ensure that banks can effectively control risks when using these technologies through more rigorous scrutiny.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
FDIC discourages member banks from using public blockchains like Ethereum, citing risks associated with their decentralized and public nature.
FDIC believes that using private permissioned networks is safer than public blockchains because it allows for control over participants and activities.
FDIC has implemented a more stringent review process for member banks launching products using public blockchains.
FDIC has requested that member banks pause activities related to crypto assets, including buying and selling Bitcoin.