Blockchain Applications in Financial Services BFC Practice Questions (Page 5)

Questions 21–25

1. 21application · medium

   A supply chain finance platform wants to use blockchain to provide early payment to suppliers based on approved invoices. They plan to use smart contracts to automatically release funds when goods are delivered and accepted. What is a critical requirement for this system to work effectively?

   • AA public blockchain to ensure all transactions are visible to regulators.
   • BA manual approval step for every invoice to prevent fraud.
   • CIntegration with a reliable and trusted system of record for delivery confirmation.
   • DA fixed payment schedule that ignores delivery confirmations.
   Reveal Solution Discussion Select an answer first
2. 22application · medium

   A DeFi protocol wants to offer decentralized borrowing and lending. The team is concerned about regulatory scrutiny because the protocol has no central operator. They want to reduce the risk of being classified as an unlicensed securities exchange. Which measure is most likely to help?

   • AAdd a centralized admin key that can pause trading and freeze funds.
   • BLaunch the protocol without any governance or upgrade mechanism to remain immutable.
   • CImplement governance mechanisms that allow token holders to vote on protocol upgrades and risk parameters.
   • DRestrict access to users from certain jurisdictions to avoid regulatory overlap.
   Reveal Solution Discussion Select an answer first
4. 23application · medium

   A trade finance consortium wants to digitize supply chain financing for small suppliers. They need to provide financing based on verified invoices. Which blockchain feature is most important to enable this?

   • AA private ledger only accessible to the lead buyer.
   • BA database that stores invoices in encrypted form with no sharing.
   • CA public ledger with no access controls.
   • DA shared ledger that records invoice issuance and payment status, visible to all authorized parties.
   Reveal Solution Discussion Select an answer first
5. 24application · medium

   A real estate investment firm wants to tokenize a commercial property to allow fractional ownership by international investors. They need to ensure compliance with securities regulations in multiple jurisdictions. Which approach best addresses both liquidity and regulatory compliance?

   • AIssue a security token on a permissioned blockchain with investor accreditation checks and jurisdiction-based transfer restrictions.
   • BIssue a utility token on a public blockchain with no transfer restrictions to maximize liquidity.
   • CUse a paper-based ledger for ownership records and a public blockchain only for marketing.
   • DTokenize the property on a private blockchain that only the firm's employees can access.
   Reveal Solution Discussion Select an answer first
6. 25expert · hard

   A supply chain company wants to tokenize warehouse receipts for commodities to enable easier financing. They need to ensure that the token represents a real, unduplicated claim on the underlying commodity. They also want to reduce the risk of double-spending the same receipt. Which approach is most effective?

   • AUse a public blockchain with no access controls to maximize transparency.
   • BUse a paper-based system with serial numbers and manual verification.
   • CUse a blockchain-based registry where each receipt is a unique token and transfers are recorded on-chain.
   • DUse a centralized database with a trusted administrator to manage receipts.
   Reveal Solution Discussion Select an answer first