#FDIC Restricts Banks from Using Ethereum#

The Federal Deposit Insurance Corporation (FDIC) is cautious about banks using public blockchains like Ethereum and requires banks to undergo more rigorous scrutiny before using them. According to communication records between the FDIC and member banks obtained by Coinbase through a Freedom of Information Act request, the FDIC expressed concerns about a bank's plan to launch a "bank digital deposit" program on a public blockchain and required the bank to undergo a new, detailed review process before launching any public blockchain-based products. The FDIC appears to favor banks using private permissioned networks over public blockchains, as the decentralized and permissionless nature of public blockchains would result in transparent and publicly viewable activity that cannot be controlled by third parties. Additionally, the FDIC has also requested that member banks pause all activities related to crypto assets, including the buying and selling of Bitcoin. These actions suggest that the FDIC has a degree of concern about banks using cryptocurrencies and public blockchain technology and wants to impose stricter regulations on their use.