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 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)
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