The Federal Reserve recently published a paper on distributive ledger technology, citing the agency’s public policy interest in understanding and monitoring innovations that could affect the structural design and functioning of financial markets. The paper discussed uses and challenges of the technology including, legal, settlement, operational, and financial risks -- which tend to be concentrated with financial intermediaries such as banks, broker-dealers and institutions that centralize and facilitate the clearing, settlement, and recording of financial transactions. The Fed paper also notes that the development of applications for blockchain technology is in early stages, but that there have already been reports that the technology will be used within the next year or two in actual production environments. Some early adopters are already facing challenges. The R3 CEV LLC blockchain consortium recently experienced an exodus of major partners as Goldman Sachs, Santander and Morgan Stanley quit the consortium. R3 also recently revised an equity funding plan and is changing the structure of its fundraising deal which sought initially to sell 90 percent of the company to raise $200 million but will now seek $150 million by selling 60 percent of the company. Other startups, such as Digital Asset Holdings and Ethereum, are seeking market share to help large financial institutions adapt the technology to carry out financial processes, such as making international payments or settling trades in securities.