The U.S. Treasury is exploring the inclusion of identification checks in smart contracts, raising concerns about undermining the core of Decentralized Finance.

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CoinVoice has learned that, according to Cointelegraph, the U.S. Treasury is exploring whether identification checks should be directly incorporated into Decentralized Finance ( DeFi ) smart contracts, with critics warning that this move could rewrite the fundamental basis of permissionless finance.

The CEO of Ubuntu Tribe, Mamadou Kwidjim Toure, stated that this initiative seems like "installing cameras in every living room," which could ultimately hollow out the core of Decentralized Finance, as it transforms a neutral, permissionless infrastructure into one that requires government-approved identification to access.

However, supporters believe that establishing Know Your Customer ( KYC ) and Anti-Money Laundering ( AML ) checks within the blockchain infrastructure can simplify compliance and keep criminals at bay.

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