A blockchain is a decentralised, distributed and public digital ledger that is used to record transactions between members of a network. The widespread adoption of blockchain in the banking industry offers advantages but also poses risks relative to their anti-competitive impact on financial markets. On the one hand, blockchain will improve transparency and traceability of financial products to be exchanged, thereby undermining the need for intermediaries. On the other hand, blockchain could prove helpful to create or facilitate coordination among competing banks. This is because, by increasing market transparency, blockchain could help competing banks to establish coordination, monitor adherence to coordinated behaviour, and (to a certain extent) effectively punish deviations. For these reasons, the adoption of blockchain technology should go with the identification of safe harbours when dealing with information made public on blockchain.

Compass Lexecon experts Miguel de la Mano and Guillaume Duquesne and FTI Consulting expert Karthik Balisagar discuss the advantages and risks of blockchain adoption by fintech in the latest edition of Concurrences Review.

Published with kind permission from Revue Concurrences.

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