Unlicensed Blockchain Use by Banks: A Risky Proposition Warns Basel

IconCryptoNewsTerminal Staff29 Aug, 2024

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Unlicensed Blockchain Use by Banks: A Risky Proposition Warns Basel

The Basel Committee on Banking Supervision (BCBS), an arm of the Bank for International Settlements (BIS), has raised concerns about the risks associated with banks using permissionless blockchains. These concerns include money laundering, terrorist financing, and other security vulnerabilities, as detailed in their recent report. The report highlights several risk areas, including operational and security issues, governance challenges, legal uncertainties, settlement finality concerns, and regulatory compliance complexities. To address privacy concerns, the report suggests exploring zero-knowledge proofs as a potential solution. In conclusion, the report underscores the need for caution and regulatory oversight in the use of permissionless blockchains by banks, emphasizing the importance of understanding and mitigating associated risks.

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