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)

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Abstract

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
Dates:	Date Event 14 June 2023 Submitted
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 > College of Accountancy, Finance and Economics > Centre for Accountancy Finance and Economics Faculty of Business, Law and Social Sciences > College of Business, Digital Transformation & Entrepreneurship
Depositing User:	Erez Yerushalmi
Date Deposited:	16 Jun 2023 12:01
Last Modified:	20 Jun 2024 12:05
URI:	https://www.open-access.bcu.ac.uk/id/eprint/14467

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