University of Twente Student Theses


Blockchain and banking efficiency : global evidence from Ripple network adoption

Breda, L. van (2023) Blockchain and banking efficiency : global evidence from Ripple network adoption.

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Abstract:The adoption of blockchain technology, due to its apparent benefits relating to no reconciliation issues, speed of transaction through smart contracts and immutability of transaction records, is expected to result in overall banking efficiency and profitability. However, there is no empirical evidence to verify these claims. We provide evidence by assessing 101 banks adoption of Ripple technology (for cross border payments) on banking liquidity, operating efficiency and market valuation. Using difference-in-differences approach, we show that, compared to the non-adopted banks, adopted banks did not experience higher liquidity in the post implementation period, nor did adoption result in benefits in operating efficiency or valuation. However, when we focus on early adopters, with longer post-adoption history, we find significant reduction in operating efficiency and liquidity. Taken together, our results indicate that blockchain adoption benefits are negligible in the short run, but significant in the long run.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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