Basel Committee on Banking Supervision: banks face multiple risks for trading on unlicensed blockchain

In a newly released report, the Basel Committee on Banking Supervision (BCBS) noted that banks face multiple risks from trading on unlicensed blockchains, including challenges in money laundering, terrorism financing, operations and security, governance, legal, settlement finality, and compliance.The BCBS, which is part of the Bank for International Settlements (BIS), the world's premier standard-setting body for prudential supervision of banks, has noted that certain risks stem from blockchain's reliance on unknown third parties, which makes it difficult for banks to conduct due diligence and oversight. In addition, banks face political uncertainty. New legislation could change verifier behavior and make the blockchain itself operationally unstable.