Blockchain and Market Risk - How Wall Street Experts are Leveraging Distributed Ledger Technology to Mitigate Exposure

Abstract

This study investigates the impact of blockchain technology on market risk management among financial institutions. A quantitative cross-sectional survey design was employed, and data were collected from 35 respondents using a structured questionnaire. The findings suggest that blockchain adoption has a significant positive effect on market risk management (β = 0.50, p < 0.001). Perceived benefits also have a significant positive effect on market risk management (β = 0.30, p < 0.01), while perceived challenges have a significant negative effect (β = -0.20, p < 0.05). The study's findings support the Technology Acceptance Model (TAM) and the Diffusion of Innovation (DOI) theory. The values of the coefficients indicate that blockchain adoption has a moderate to strong positive impact on market risk management. The perceived benefits of blockchain technology, such as improved transparency and efficiency, contribute to its adoption and positive impact on market risk management. However, perceived challenges, such as regulatory uncertainty and technical complexity, hinder the adoption and impact of blockchain technology. The study's findings have implications for financial institutions, regulators, and policymakers. Financial institutions should invest in blockchain technology to improve market risk management. Regulators should provide clear guidelines and regulations for the adoption of blockchain technology, and policymakers should provide incentives for financial institutions to invest in blockchain technology.