A group of powerful United States regulators has named Bitcoin and Blockchain technologies as being a threat to financial stability in a new report.
The report (pdf) from the Financial Stability Oversight Council, which includes representatives of the Federal Reserve, the Securities and Exchange Commission (SEC) and the Treasury Department, serves to identify risks and respond to emerging threats to the stability of the U.S. financial system.
A section in the report called “Financial Innovation and Migration of Activities, dedicated to distributed ledger systems, explained that “market participants have limited experience working with distributed ledger systems, and it is possible that operational vulnerabilities associated with such systems may not become apparent until they are deployed at scale.”
“Since the set of market participants which makes use of a distributed ledger system may well span regulatory jurisdictions or national boundaries,” the report added “a considerable degree of coordination among regulators may be required to effectively identify and address risks associated with distributed ledger systems.”
Bitcoin was specifically mentioned, with the report noting that it has experienced “dramatic” increase in transaction failures and trade delays due to the speed of transactions overtaking the rate they are added to the Blockchain.