The Federal Deposit Insurance Corporation (FDIC) has reportedly discouraged banks from using public blockchain networks like Ethereum for new services, as revealed by recently unredacted documents obtained by Coinbase through a Freedom of Information Act request. The FDIC expressed concerns over a member bank's plans to launch a “Bank Digital Deposit” program on a public blockchain, emphasizing the preference for private, permissioned blockchains that offer more controlled environments. FDIC communication indicated the need for a detailed review process before any public blockchain products could be launched, reflecting a cautious stance against decentralized, transparent networks. Additionally, other letters disclosed indicated the FDIC's directive to halt bank activities related to buying and selling Bitcoin, further underscoring the regulatory scrutiny on cryptocurrency operations within traditional banking structures. Coinbase's legal officer highlighted these developments as evidence of a coordinated regulatory initiative against the crypto industry under the current administration, calling attention to wider implications for crypto-related banking activities and innovation.

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