During an interview on Bloomberg Radio on March 6, Coinbase CEO Brian Armstrong revealed that the firm’s upcoming layer-2 blockchain, Base, may include Anti-Money Laundering (AML) measures and transaction monitoring features.
Armstrong noted that centralized actors should take more responsibility to comply with AML requirements and implement transaction monitoring programs in their networks. However, he did not specify whether the firm would implement Know Your Customer (KYC) or AML obligations on the new blockchain.
The cryptocurrency industry has faced significant challenges lately, including stricter regulations and a sell-off in coin prices that led to the crash of many firms. As a result, regulators are pushing for stricter regulations to protect investors.
Armstrong stated that while Base features some centralized components, it will become more decentralized over time. The users of the new blockchain may be subject to AML requirements, and the platform may implement transaction monitoring programs.
The new layer-2 network is designed to address the scalability issues associated with Ethereum and provide faster and cheaper transactions. However, concerns have been raised about the potential impact of AML measures on privacy and decentralization.
While the implementation of AML measures may help Coinbase comply with regulations and enhance security, it may also hinder the adoption of Base by some crypto enthusiasts who value privacy and decentralization.