Technical and Operational Integration Models in Financial Blockchain Systems BFC Practice Questions (Page 10)

Questions 46–50

1. 46expert · hard

   A global bank is integrating a public blockchain for cross-border payments. The bank must comply with GDPR, which restricts the transfer of personal data outside the EU. The bank's legal team insists that no personal data be stored on the public blockchain. However, the payment process requires verifying the identity of the sender and receiver. Which integration approach best satisfies both the GDPR constraint and the identity verification requirement?

   • AUse a private blockchain instead of a public one to avoid GDPR restrictions.
   • BStore personal data on the blockchain but only for EU-based transactions.
   • CEncrypt personal data and store it on the public blockchain, arguing that encryption makes it non-personal.
   • DStore only hashed references to identity data on the blockchain, while keeping the actual personal data in an off-chain EU-hosted database.
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2. 47application · medium

   A payment processor is integrating a public blockchain to settle high-volume micro-transactions. The current system handles 5,000 transactions per second, but the blockchain's base layer only supports about 15 transactions per second. Which technical approach would best address this scalability gap?

   • ARoute all transactions through a single middleware server that writes them sequentially.
   • BIncrease the block size and reduce block time on the public blockchain.
   • CUse a Layer-2 solution such as a state channel or rollup to batch transactions off-chain and settle final balances on-chain.
   • DSwitch to a private blockchain with a higher transaction rate and no need for off-chain solutions.
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4. 48application · medium

   A bank is integrating a blockchain-based trade-finance platform with its internal loan system. The bank must ensure that only authorized employees can trigger blockchain transactions, and that every transaction is attributable to a specific employee. Which integration measure should the bank implement?

   • AAllow direct smart-contract calls from the internal network without authentication, relying on network security.
   • BUse a shared service account for all API calls to simplify integration and reduce overhead.
   • CLog all transactions in the blockchain only, without integrating with the bank's identity system.
   • DIntegrate the bank's identity provider (IdP) with the blockchain middleware so that each API call carries the employee's authenticated identity and role-based permissions are enforced.
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5. 49foundation · easy

   When integrating blockchain into a financial system, what is the primary purpose of incorporating regulatory compliance requirements into the smart contract logic?

   • ATo ensure that all transactions are publicly visible to everyone.
   • BTo eliminate the need for any external audits.
   • CTo make the blockchain network faster by reducing the number of transactions.
   • DTo automate the enforcement of compliance rules, such as transaction limits or reporting obligations.
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6. 50foundation · easy

   What is the primary role of middleware in integrating blockchain with existing financial systems?

   • ATo act as an intermediary that translates and routes data between the blockchain and legacy applications.
   • BTo store the entire blockchain ledger on a central server for faster access.
   • CTo provide a user interface for blockchain administrators to monitor transactions.
   • DTo replace the need for any APIs or smart contracts in the integration.
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