#FDIC Restricts Banks from Using Ethereum#
Hot Topic Overview
Overview
Recently, the Federal Deposit Insurance Corporation (FDIC) has raised concerns about banks using public blockchains, such as Ethereum, and has imposed restrictions on member banks' use of public blockchains. According to unredacted documents obtained by Coinbase through a Freedom of Information Act request, the FDIC believes that the decentralized and transparent nature of public blockchains poses risks and requires banks to undergo a more rigorous review process before using them. Additionally, the FDIC has instructed member banks to cease implementing services related to the buying and selling of Bitcoin and to suspend all activities related to crypto assets. This move indicates that the FDIC is cautious about banks using cryptocurrencies and public blockchain technology and desires stricter regulation of these activities.
Ace Hot Topic Analysis
Analysis
The Federal Deposit Insurance Corporation (FDIC) is cautious about banks using public blockchains like Ethereum, requiring them to undergo more stringent scrutiny before doing so. This news stems 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 the FDIC views the decentralized and transparent nature of public blockchains as a risk, encouraging banks to use private permissioned networks instead. For instance, in a March 2022 letter, the FDIC required a New York bank to undergo a new, detailed review process before launching any products on a public blockchain. Additionally, the FDIC has asked member banks to cease implementing services related to buying and selling Bitcoin and instructed member banks to "pause all activities related to crypto assets." This event indicates that the FDIC remains cautious in its regulatory approach to cryptocurrencies and seeks to exert tighter control over banks' use of public blockchains.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
FDIC does not encourage member banks to use public blockchains such as Ethereum, citing concerns about their decentralized and transparent nature.
FDIC prefers member banks to use private permissioned networks, as these networks allow for controlled access and activity.
FDIC has introduced a new review process for member banks launching products on public blockchains and has requested that member banks pause activities related to crypto assets.
FDIC's stance may stem from concerns about the security, privacy, and regulatory compliance of public blockchains.