U.S. Treasury Considers Identity Checks in DeFi Smart Contracts

According to PANews, the U.S. Treasury is evaluating the potential integration of identity verification directly into decentralized finance (DeFi) smart contracts. Critics argue that this move could fundamentally alter the permissionless nature of DeFi. Mamadou Kwidjim Toure, CEO of Ubuntu Tribe, likened the proposal to installing cameras in every living room, suggesting it could undermine DeFi's core by transforming a neutral, permissionless infrastructure into one requiring government-approved identity credentials for access. However, proponents believe that incorporating Know Your Customer (KYC) and Anti-Money Laundering (AML) checks into blockchain infrastructure could streamline compliance and deter criminal activities.