New US regulatory guidance allowing banks to become validators for blockchain networks is a major step for institutional adoption but worsens centralization risks, Bohdan Opryshko, chief operating officer of staking service provider Everstake, told Cointelegraph. On March 7, the US Office of the Comptroller of the Currency (OCC) eased its stance on how banks can engage with crypto, including permitting banks to participate “in independent node verification networks,” the regulator said. Opryshko said US banks’ increased involvement in proof-of-stake (PoS) networks, such as Ethereum and Solana, could be a “double-edged sword.” “If banks become dominant validators, power could become concentrated, reducing the decentralized nature of PoS networks,” Opryshko told Cointelegraph on March 12.
The additional financial inflows into PoS networks could also suppress staking yields, potentially undermining smaller validators, he added.“If major institutional players, such as banks, enter the staking market and suddenly stake large amounts, […] it could cause a sharp reduction in staking rewards for all other participants,” Opryshko said. Staking yields as of March 12.
Crypto industry outrage over so-called “debanking” reached a crescendo when a June 2024 lawsuit spearheaded by Coinbase resulted in the release of letters showing US banking regulators asked certain financial institutions to “pause” crypto banking activities.In a Jan.23 executive order, Trump — who has vowed to make America the “world’s crypto capital” — told agencies to prioritize “fair and open access to banking services” for digital asset firms.
or
Share This Story
Article Details
Author / Journalist: Cointelegraph by Alex O’Donnell
The story "Banks acting as validators risks centralization — Everstake exec" has 369 words across 13 sentences, which will take approximately 2 - 4 minutes for the average person to read.
Which news outlet covered this story?
The story "Banks acting as validators risks centralization — Everstake exec" was covered 1 days ago by Coin Telegraph, a news publisher based in United States.
How trustworthy is 'Coin Telegraph' news outlet?
Coin Telegraph is a fully independent (privately-owned) news outlet established in 2013 that covers mostly crypto news.
The outlet is headquartered in United States and publishes an average of 1071 news stories per day.
It's most recent story was published 8 hours ago.
What do people currently think of this news story?
The sentiment for this story is currently Negative, indicating that people regard this as "bad news".
How do I report this news for inaccuracy?
You can report an inaccurate news publication to us via our contact page. Please also include the news #ID number and the URL to this story.
