Blockchain and supply chain finance: A critical literature review at the intersection of operations, finance and law

Ilias Ioannou, Guven Demirel

Research output: Contribution to journalArticle (Academic Journal)peer-review

Abstract

In the current environment, where the Covid-19 pandemic has exposed the vulnerabilities of the incumbent paper-based trade and supply chain finance systems, digital transformation pledges to alleviate the friction on international trade. Here, we provide a timely review of state-of-the-art industry applications and theoretical perspectives on the use of blockchain as the medium toward digitalisation for supply chain finance systems. We argue that blockchain technology has an innovation-promoting role in supply chain finance solutions through reducing inefficiencies and increasing visibility between different parties, which have hitherto constituted the main challenges in this sphere. Based on a review of the academic literature as well as an analysis of the industrial solutions that have emerged, we identify and discuss the financial, operational and legal
challenges encountered in supply chain financing and the promise of blockchain to address these limitations. We discuss the bottlenecks as well as the benefits of blockchain and identify some necessary conditions required for the emergence of
blockchain-enabled trade and supply chain financing, such as the establishment of co-opetition among supply chain actors, integration with IoT systems for data quality, and reform of regulatory and legal frameworks. We conclude by identifying promising research directions about the implementation process, inviting further research into the transformation of business models toward a more collaborative nature.
Original languageEnglish
Pages (from-to)83-107
JournalJournal of Banking and Financial Technology
Volume6
DOIs
Publication statusPublished - 9 May 2022

Keywords

  • Blockchain
  • Distributed Ledger Technology
  • smart contracts
  • Supply chain finance
  • Trade finance
  • Fintech

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