BlockNews
FOLLOW ON X
  • BITCOIN
  • CRYPTO
    • ETHEREUM
    • RIPPLE XRP
    • SOLANA
    • CARDANO
    • BINANCE BNB
    • DOGECOIN
    • TRON
    • SUI
    • CHAINLINK
    • LITECOIN
  • FINANCE
  • POLITICS
  • MEMECOINS
  • NFT
  • OPINION
No Result
View All Result
BlockNews
  • BITCOIN
  • CRYPTO
    • ETHEREUM
    • RIPPLE XRP
    • SOLANA
    • CARDANO
    • BINANCE BNB
    • DOGECOIN
    • TRON
    • SUI
    • CHAINLINK
    • LITECOIN
  • FINANCE
  • POLITICS
  • MEMECOINS
  • NFT
  • OPINION
No Result
View All Result
BlockNews
Home BREAKING NEWS

BIS Paper Explores Risks and Solutions for Banks Using Public Blockchains

Matoy by Matoy
August 30, 2024
in BREAKING NEWS, CRYPTO
Reading Time: 3 mins read
2
SHARES
28
VIEWS
Share on XShare in TelegramShare on Reddit
  • BIS working paper details risks banks face from permissionless blockchains, including security and compliance issues.
  • Public blockchains like Ethereum pose operational challenges for banks due to their open participation nature.
  • The paper suggests potential mitigations like business continuity plans and transaction controls.

A recent study released by the Bank for International Settlements (BIS) delves into the complexities and potential perils that banks encounter when engaging with permissionless blockchain technologies like Ethereum. The study, conducted by the Basel Committee on Banking Supervision (BCBS), offers insights into how these technologies could impact the banking sector.

Understanding Permissionless Blockchains

Permissionless, or public, blockchains allow any user to participate in their networks without needing approval, contrasting sharply with private blockchains where access is restricted. Prominent examples of public blockchains include Bitcoin and Ethereum, which stand in contrast to private networks like Ripple’s XRP Ledger.

The BIS working paper titled “Novel risks, mitigants and uncertainties with permissionless distributed ledger technologies,” elaborates on the inherent risks associated with these platforms. Issues such as money laundering, terrorism financing, and the challenges of settlement finality are prominent concerns due to the anonymous nature of transactions on these networks.

Exploring Risks and Mitigations

The paper pinpoints several risk factors that banks must manage when transacting on public blockchains. These include operational and security risks, governance complications, and legal and compliance challenges. One significant concern is the difficulty banks face in performing due diligence due to the anonymity of parties involved in blockchain transactions.

To counter these challenges, the BCBS paper outlines several strategies that banks could adopt. It suggests robust business continuity planning which could include maintaining off-chain registries to safeguard asset ownership in the event of disruptions like hard forks or cyber-attacks.

Additionally, the paper proposes the appointment of a controller entity. This entity would not control the blockchain itself but would manage access to specific crypto assets, allowing it to block or reverse fraudulent transactions. This could help banks mitigate legal and compliance risks associated with these technologies.

Emerging Solutions and Future Directions

The working paper also discusses advanced technological solutions like zero-knowledge proofs (ZKP), which could offer privacy-preserving identity verification without compromising transaction security. However, it notes that such technologies are still in early development stages and require further research and refinement.

The Basel Committee members contributing to this work come from diverse international backgrounds, including representatives from Canada, Europe, Japan, and the United States, highlighting the global relevance of the issues discussed.

The paper concludes that while current mitigations for the risks posed by public blockchains are still developing, ongoing technological advancements could soon provide more robust solutions. This ongoing dialogue is crucial as banks continue to explore the integration of blockchain technologies into their operational frameworks.

Disclaimer: BlockNews provides independent reporting on crypto, blockchain, and digital finance. All content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making investment decisions. Some articles may use AI tools to assist in drafting, but every piece is reviewed and edited by our editorial team of experienced crypto writers and analysts before publication.
Tags: Bank
Tweet1ShareShare
Matoy

Matoy

If Matoy is not busy looking at the latest Web3 news, he's always in the kitchen cooking delicious meals for his family. He's also a competitive fighting game player and a car enthusiast

DON'T MISS THESE! HOT OFF THE PRESS

Market Summary: What Happened in Crypto Today?
CRYPTO

Market Summary: What Happened in Crypto Today?

September 3, 2025
Fat-Finger Error Dumps Pump Fun Streamer Coin 99%, Then Surges 10,000%? Here is What Happened
CRYPTO

Fat-Finger Error Dumps Pump Fun Streamer Coin 99%, Then Surges 10,000%? Here is What Happened

September 3, 2025
Solana Memecoin TROLL Acquires IP Rights to Trollface Meme: Here is Why This is Game Changing
CRYPTO

Solana Memecoin TROLL Acquires IP Rights to Trollface Meme: Here is Why This is Game Changing

September 3, 2025
Flipping Memecoins: Can It Really Be a Full-Time Job?
CRYPTO

Flipping Memecoins: Can It Really Be a Full-Time Job?

September 3, 2025
Trump-backed ‘American Bitcoin’ Stock Trading Halted After Explosive Opening: Here is What Happened
BITCOIN

Trump-backed ‘American Bitcoin’ Stock Trading Halted After Explosive Opening: Here is What Happened

September 3, 2025
Tron Inc. Doubles Down on TRX Holdings With $110M Investment
CRYPTO

Tron Inc. Doubles Down on TRX Holdings With $110M Investment

September 3, 2025
Load More

Related News

Market Summary: What Happened in Crypto Today?

Market Summary: What Happened in Crypto Today?

September 3, 2025
Fat-Finger Error Dumps Pump Fun Streamer Coin 99%, Then Surges 10,000%? Here is What Happened

Fat-Finger Error Dumps Pump Fun Streamer Coin 99%, Then Surges 10,000%? Here is What Happened

September 3, 2025
Solana Memecoin TROLL Acquires IP Rights to Trollface Meme: Here is Why This is Game Changing

Solana Memecoin TROLL Acquires IP Rights to Trollface Meme: Here is Why This is Game Changing

September 3, 2025
Flipping Memecoins: Can It Really Be a Full-Time Job?

Flipping Memecoins: Can It Really Be a Full-Time Job?

September 3, 2025
Fed Signals Multiple Rate Cuts Coming in 2025: Here is Why

Fed Signals Multiple Rate Cuts Coming in 2025: Here is Why

September 3, 2025
Twitter Telegram Threads

BLOCKNEWS.COM

BlockNews is your premier source for real-time cryptocurrency, blockchain, political and financial market news.

Stay ahead of the herd with BlockNews

RESOURCES

  • About Us
  • Contact Us
  • Editorial Policies
  • Terms and Conditions
  • Privacy Policy
  • Sitemap

DISCLOSURES AND POLICIES

BlockNews provides independent reporting on crypto, blockchain, and digital finance. Content is for informational purposes only and does not constitute financial advice. Sponsored material is always disclosed. By using this site, you agree to our Terms and Conditions and Privacy Policy.

© 2025 BlockNews

No Result
View All Result
  • HOME
  • BITCOIN
  • CRYPTO
    • ETHEREUM
    • RIPPLE XRP
    • SOLANA
    • CARDANO
    • BINANCE BNB
    • DOGECOIN
    • TRON
    • LITECOIN
    • CHAINLINK
    • SUI
  • MEMECOINS
  • POLITICS
  • FINANCE
  • NFT
  • DEFI
  • GUIDES

© 2025 BlockNews