US Treasury Considers Identity Checks in DeFi Smart Contracts

24/08/2025 18:29

The U.S. Treasury Department is evaluating the integration of identity checks into decentralized finance (DeFi) smart contracts, a move that has sparked debate over its impact on the core principles of DeFi. Critics argue that this could undermine the permissionless nature of DeFi, likening it to "installing cameras in every living room," according to Ubuntu Tribe CEO Mamadou Kwidjim Toure. They fear it could transform DeFi into a system requiring government-approved credentials for access. Proponents, however, see potential benefits in embedding Know Your Customer (KYC) and Anti-Money Laundering (AML) checks into blockchain infrastructure. They argue that such measures could streamline compliance processes and enhance security by preventing criminal activities within the DeFi ecosystem.

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