Blockchain in Financial Intermediation and Beyond: What are the Main Barriers for Widespread Adoption?

Yerushalmi, Erez and Paladini, Stefania (2023) Blockchain in Financial Intermediation and Beyond: What are the Main Barriers for Widespread Adoption? Working Paper 22. Centre for Applied Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University. (Submitted)

20230614_Yerushalmi_Paladini_CAFE_WP22_Institutional Barriers to Blockchain.pdf - Submitted Version

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Blockchain-enabled cryptocurrency instruments have gradually filtered into financial intermediation, disrupting traditional institutions. This paper discusses the benefits of blockchain to household welfare, focusing on financial intermediation services (FIS). Its main aim is to highlight points of incompatibility with current institutional frameworks and outlines the greatest barriers for its widespread adoption (i.e., regulatory, technological, and environmental). To support our discussion, we develop a stylized general equilibrium model with two competing FIS technologies (i.e., traditional and blockchain). We show that removing these barriers could displace traditional institutions with blockchain technology and raise welfare. Finally, we argue that the 2022 and 2023 cryptocurrency scandals and the ongoing calls for comprehensive, cross-country, institutional changes will be remembered as a turning point in terms of serious efforts to integrate this new technology and make it more mainstream.

Item Type: Monograph (Working Paper)
Identification Number: 22
14 June 2023Submitted
Uncontrolled Keywords: Blockchain, Institutional Barriers, Fintech, Cryptocurrencies, Financial Intermediation
Subjects: CAH00 - multidisciplinary > CAH00-00 - multidisciplinary > CAH00-00-00 - multidisciplinary
CAH15 - social sciences > CAH15-02 - economics > CAH15-02-01 - economics
CAH15 - social sciences > CAH15-03 - politics > CAH15-03-01 - politics
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Centre for Applied Finance and Economics
Depositing User: Erez Yerushalmi
Date Deposited: 16 Jun 2023 12:01
Last Modified: 16 Jun 2023 12:01

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