Recent regulatory changes in the US allow banks to become validators in blockchain networks, potentially affecting the decentralized nature of these networks.
Regulatory Changes by OCC
On March 7, the US Office of the Comptroller of the Currency (OCC) eased its stance by permitting banks to participate in 'independent node verification networks.' This change could significantly boost institutional adoption of blockchain technologies.
Centralization Risks
Bohdan Opryshko from Everstake noted that bank participation could lead to power concentration in PoS networks like Ethereum and Solana. "If banks become dominant validators, it could reduce the decentralized nature of PoS networks," Opryshko told Cointelegraph on March 12.
Debanking Issue and Industry Reaction
The OCC’s announcement followed US President Donald Trump's vow to end long-standing regulatory restrictions that hampered crypto firms’ access to banking services. This led to industry outrage, culminating in a 2024 lawsuit initiated by Coinbase revealing that US banking regulators had asked some institutions to 'pause' crypto banking activities.
While the recent regulatory changes present new opportunities for banks and support institutional adoption, the risks of centralization remain a key concern for decentralized blockchain networks.
