What Are the Operational Risks of a Single Entity Controlling a Private Blockchain for Clearing and Settlement?

A single entity controlling a private blockchain for clearing and settlement introduces significant operational risks. The primary risk is centralization; if the controlling entity fails, the entire network could be compromised or shut down, creating a single point of failure.

This entity could also manipulate transaction ordering or censor transactions for its own benefit, undermining the integrity of the settlement process. Furthermore, the lack of external oversight and transparency could lead to disputes and make it difficult for participants to audit and verify the ledger's accuracy independently.