Coinbase CEO: Transaction Monitoring And Anti-money Laundering Procedures May Be Used In Base

Key  Points:

• Base, according to the CEO, will have some centralized components but will grow increasingly decentralized.
• Any existing Coinbase products that are integrated with Base will keep their previous KYC/AML safeguards.

Coinbase CEO Brian Armstrong responded to a query about the company’s latest Ethereum L2 network Base in a recent interview.

The Coinbase CEO stated that Base will have some centralized components, but that it will become increasingly decentralized over time, and that it will now be responsible for transaction monitoring, which means that while Base will be open to all developers, it will eventually become the home of products on the platform chain. Any existing products that Coinbase connects with Base would, presumably, retain their previous KYC/AML safeguards.

Over time, Armstrong believes that centralized actors will be responsible for avoiding money laundering and maintaining transaction monitoring mechanisms. It is unclear if Armstrong meant this comment to apply only to centralized actors on Base or to all centralized actors. Despite the fact that Base will be available to all developers, Coinbase’s original statement indicated that Base will be a home for Coinbase’s on-chain products. An prior release also implied that Base would become “progressively decentralized,” but did not imply a lack of regulatory compliance.

Base was first revealed by Coinbase on February 23. At the time, the business stated that it intends to construct the platform in partnership with Optimist, an existing layer-2 Ethereum project. Coinbase will become a core developer for Optimism and will use the OP Stack. Base will also function with Ethereum, other layer-2 networks, and compatible layer-1 blockchains such as Solana, according to the startup. Base is now on testnet, where developers may access it but it is not yet suitable to practical use cases. Coinbase has not set a date for the mainnet’s debut.

The CEO stated today that Base is designed to improve scalability and usability on Ethereum and comparable networks by reducing transaction fees to one penny or less. Contrary to popular belief, Base does not have its own token.

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