Research Seminar by Prof. Vijaya Bhaskar Marisetty

Sixth research seminar of the academic year was conducted at IIMK on 04th September 2023. The topic of the seminar was “”Is Blockchain beneficial for Banks? Evidence from the Ripple Network Adoption”.

The abstract of the talk is as follows

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, has taken off quite well in the banking and financial services industry. However, there is no empirical evidence on whether these claimed benefits translate into banking efficiency. In this paper, we try to answer this question by assessing the impact of Ripple technology (for cross border payments) on banking liquidity, operating efficiency and bank market valuation. Using a difference-in-differences approach, we show that, globally, banks that adopted Ripple have improved their liquidity, however, reduced their operating efficiency and valuation compared to the bank that did not announce introducing any blockchain technology. Our results suggest that blockchain adoption has limited benefits.

 

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