- FDIC documents reveal active discouragement of banks from offering public blockchain services.
- Coinbase obtained 25 letters through FOIA request showing regulatory pushback.
- Federal regulator shows preference for private, permissioned blockchain networks over public ones.
- Member banks ordered to halt Bitcoin-related services and crypto asset activities.
- Documents suggest coordinated regulatory action against cryptocurrency sector integration.
FDIC Restrains Banks from Public Blockchain Ventures, Documents Show
Newly unredacted documents expose the Federal Deposit Insurance Corporation’s active efforts to limit American banks’ involvement with public blockchain networks, according to records released on Friday through a court order.
Regulatory Resistance to Public Networks
The FDIC’s March 2022 correspondence to a New York-based member bank highlighted concerns about the institution’s planned “Bank Digital Deposit” program on a public blockchain. The federal regulator expressed specific reservations about using public networks like Ethereum or Solana, which operate without centralized control, instead favoring private, permissioned systems.
Private blockchain networks differ from public ones in several key aspects:
- Restricted access and participation
- Centralized administration
- Control over transaction validation
- Limited transparency
Document Disclosure Impact
Coinbase, the San Francisco-based cryptocurrency exchange, acquired these communications through the Freedom of Information Act. Initially receiving 23 heavily redacted letters, the company gained access to two additional documents following legal intervention.
The correspondence patterns indicate broader regulatory restrictions, with multiple banks receiving directives to stop cryptocurrency-related activities. Coinbase Chief Legal Officer Paul Grewal stated on X that the documents demonstrate coordinated regulatory action against cryptocurrency operations.
Industry observers have labeled these actions as “Operation Chokepoint 2.0,” drawing parallels to Obama-era banking regulations that targeted specific industries. The current situation represents an apparent shift in regulatory approach toward cryptocurrency integration within traditional banking systems.
The unredacted letters show the FDIC implementing additional review requirements for banks planning to launch products on public blockchains, creating new barriers for financial institutions seeking to expand into digital asset services.
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