Cryptocurrency Crackdown: FDIC Documents Reveal Efforts to Discourage Public Blockchain Use
If you’re a fan of cryptocurrency, you might be interested to know that the Federal Deposit Insurance Corporation (FDIC) has been quietly discouraging American banks from offering services built on public blockchain networks. This revelation comes courtesy of a trove of newly unredacted documents obtained by Coinbase, a San Francisco-based cryptocurrency exchange.
What’s the Big Deal About Public Blockchains?
To understand why the FDIC is taking issue with public blockchains, let’s break it down. Public blockchains, like Ethereum and Solana, are decentralized and permissionless, meaning that anyone can use them and all activity is fully public. This transparency is a key feature of cryptocurrency, but it also raises concerns about security and regulatory compliance.
FDIC’s Concerns: A Closer Look
One of the documents, a letter sent in March 2022 from the FDIC’s New York office to a member bank, reveals that the agency had learned about the bank’s plans to launch a “Bank Digital Deposit” program on a public blockchain. The FDIC took issue with this, instructing the bank to submit to a new review process before launching any products on public blockchains.
A Pattern of Regulation
This isn’t an isolated incident. Other documents show the FDIC ordering member banks to halt the implementation of services related to buying and selling Bitcoin. In fact, sections of the same letters unredacted last month instructed member banks to “pause all crypto asset-related activity.”
“Operation Chokepoint 2.0”: A Coordinated Effort?
Coinbase Chief Legal Officer Paul Grewal believes that these revelations are part of a larger effort to stifle the crypto industry. He’s dubbed this alleged initiative “Operation Chokepoint 2.0,” borrowing the name from a previous scheme that targeted firearms dealers and payday lenders.
What Does This Mean for Crypto Enthusiasts?
While this news might seem like a setback for cryptocurrency, it’s essential to remember that regulation is a natural part of any industry’s growth. As the crypto space continues to evolve, we can expect to see more efforts to balance innovation with security and compliance.
The Future of Crypto: What’s Next?
As the crypto community navigates these regulatory waters, one thing is clear: the future of cryptocurrency will depend on finding a balance between innovation and regulation. What do you think? Share your thoughts on the future of crypto in the comments below.
Key Takeaways:
* The FDIC has been discouraging American banks from offering services built on public blockchain networks. * Public blockchains, like Ethereum and Solana, are decentralized and permissionless, raising concerns about security and regulatory compliance. * The FDIC has instructed member banks to submit to a new review process before launching products on public blockchains. * Coinbase believes that these revelations are part of a larger effort to stifle the crypto industry, dubbed “Operation Chokepoint 2.0.”
Source: Decrypt.co
The post FDIC Discourages Banks from Using Public Blockchain Networks first appeared on CoinBuzzFeed.
