Seventy Bitcoin risks | FT Alphaville

Seventy Bitcoin risks

Click to enlarge, via the European Banking Authority’s response to virtual currencies. Do note E31.

The EBA has even compiled a “risk drivers” chart. The report itself is as you’d expect from a banking regulator attempting to comprehend how differently basic concepts like ‘contract’ and ‘governance’ work in bitcoin…

A governance authority may, at first, appear incompatible with the conceptual origins of VCs as a decentralised scheme that does not require the involvement of a central bank or government. However, the mandatory creation of a scheme governance body does not imply that VC units have to be centrally issued. This function can remain decentralised and be run through, for example, a protocol and a transaction ledger. If it is true that the decentralised VC schemes are secure, it should be possible for market participants to establish themselves as scheme governance authorities…

But it appears to see bitcoin being co-opted into banking in the long run, as in that last line.

Was that what bitcoin was supposed to do?