Original scientific paper
https://doi.org/10.1080/1331677X.2021.1986672
Blockchain architecture and its applications in a bank risk mitigation framework
Hang (Robin) Luo
Dawei Yan
Abstract
This study proposes a simple two-period model to consider consumers’ borrowing behaviour in a decentralised consensus and
information distribution platform. Based on this model, we
develop a bank risk mitigation framework and find that decentralised digital identity and encryption technology are the most
important factors for attaining market equilibrium between
decentralised consensus and information distribution. Specifically,
the greater the scope of digital identity construction and the
more blockchain consensus records there are, the less likely the
borrower will default. Our study provides meaningful practical
implications for bankers and policy regulators to help them better
understand consumers’ borrowing behaviour and decisions
to default.
Keywords
Bank risk mitigation; blockchain; digital identity; encryption technology; information asymmetry
Hrčak ID:
302500
URI
Publication date:
31.3.2023.
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