The EU continues to make efforts to come to grips with distributed ledger technology. DLT, more commonly referred to as blockchain technology, and its risks to the European financial industry are the subjects of a new report published by the European Banking Authority. The report was released on July 3. The EBA has sought to define DLT and its risks in the report. The report uses case studies of two occurrences in the international trade market. Specifically, the EBA seeks to establish a definition for "digital identity" while assessing the benefits and liabilities of DLT for financial institutions. The report begins by defining digital identity as "information used to represent an entity in an informational system." It then seeks to explain the various applications of DLT for the financial sector. The EBA believes that the technology can be used to speed up the settlement of international trade transactions. Efficiency, the EBA claims, is the most apparent benefit of DLT. The enthusiasm for DLT is tempered, however, by the next part of the report. It seems to advise caution on the basis that DLT is still new. Concerns are also expressed that a lack of financial regulation undermines the technology. Another issue that is mentioned is the storage of blockchain data on nodes located in different physical localities. This, the report claims, could present jurisdiction issues in the event that problems were discovered with a transaction. Additionally, the EBA believes that the compromise of one node through a security breach could pose risks for an entire network of institutions. Even though the report is straightforward regarding risks to institutions, it should be encouraging to DLT investors. At the least, the report signals a willingness of the European financial sector to consider the legitimacy of blockchain technology. That could lead to continued acceptance around the world.