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Contemporaneous financial intermediation

Markus Merz ()
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Markus Merz: University of Tuebingen

Digital Finance, 2021, vol. 3, issue 1, No 2, 25-44

Abstract: Abstract Digital innovations in banking and payments recently have garnered a great deal of attention. Specifically, distributed ledger technology (DLT) has the potential to fundamentally change the roles and responsibilities of stakeholders in the financial sector. DLT is a novel and fast-evolving approach to record and share data, e.g., payment transactions, among members of a decentralized network. Using transaction cost theory, the paper examines how DLT will change the cross-border payment infrastructure. DLT can reduce the overall transaction costs potentially resulting in the disappearance of correspondent banks.

Keywords: Distributed ledger technology; Cross-border payments; Transaction costs; Correspondent banking; Ripple; Intermediation (search for similar items in EconPapers)
JEL-codes: E42 G21 O30 P51 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s42521-021-00029-3

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