Distributed ledger technologies and blockchain for FinTech

Abstract

In this chapter, we present the underlying technical principles of distributed ledger technology (DLT) and blockchain technology and outline their practical applications in FinTech. In recent years, DLT and blockchain technologies in general, and cryptocurrencies in particular, have attracted substantial attention from both researchers and practitioners due to their unique technological features such as the lack of centralized control and high level of anonymity. Because of the disruptive nature, DLT and blockchain have led to the evolution of decentralized applications in multiple domains such as finance, health care, supply chains etc. In this chapter, we first outline basic principles and foundations underpinning the DLT and blockchain technologies. Second, we discuss several applications in the FinTech domain such as cryptocurrencies, smart contracts, risk management, corporate finance, governance, crowdfunding, and derivative markets. Third, we summarize the different kinds of initiatives in terms of regulation, compliance and governance for cryptocurrencies and other DLT applications in the financial domain. Fourth and last, we conclude this chapter with some reflections on the impact of DLT and blockchain technologies on the FinTech domain in the near future.