|Jul 09, 2018 03:00 PM||By: Jinia Shawdagor | 7850 Views|
On Tuesday a report is published by The European Banking Authority (EBA) describing the benefits and risks of integrating distributed ledger technology (DLT) in the financial sector.
The report states, "A number of opportunities emerge from the use of DLT and smart contracts for trade finance. The most promising are the potential efficiency gains, cost reduction, and lower risk of duplicate financing and loss or manipulation of documents.”
The European Banking Authority examined that this growing technology comes with several major risk as well. As a result, conflicts of interest may arise among distributed ledger technology nodes in different jurisdictions.
The European Banking Authority explained “For example, a digitally signed contract might not be enforceable in all the jurisdictions. It is essential to establish the applicable jurisdiction, in case of conflict, and the dispute mechanisms, when a dispute arises,”.
The report also follows latest news of a group of European banks conducting some cross-border trades using a jointly developed blockchain platform.