To mitigate risks associated with public blockchain networks, the paper proposed appointing an entity with the authority to "control and limit access" to cryptocurrency assets.
Permissionless blockchain networks, such as the Ethereum blockchain, pose several risks that banks have yet to fully address, according to a new paper published on the Bank for International Settlements (BIS) website.
The Basel Committee on Banking Supervision (BCBS), a committee of banking supervisors established by the G10 central bank governors, issued a working paper on Aug. 28 devoted to the risks of permissionless blockchains and potential ways to mitigate such challenges.
The paper, titled “Novel risks, mitigants and uncertainties with permissionless distributed ledger technologies,” contains 25 pages and attempts to explore issues like governance, technology, compliance and other risks potentially stemming from the new technology.
