Permissioned Distributed Ledger Technology in BankingCompliance: Implementation Context and Use-CaseDependencies

Abstract

Permissioned distributed ledger technology (DLT) is increasingly being proposed for regulated banking, yet its feasibility hinges on whether distributed recordkeeping can meet compliance requirements for auditability, operational resilience, and accountability. This article evaluates permissioned distributed ledger technology (DLT) through three compliance-intensive use cases-interbank settlement, shared know your customer (KYC) utilities, and credit information sharing-and situates the discussion in the Chinese banking context using sector indicators of declining return on assets and rising non-performing loan ratios. It specifies the compliance dependencies that each workflow must satisfy, including legally meaningful settlement finality, audit-quality authorization trails, privacy-preserving identity and data governance, and supervision-compatible access and governance arrangements. This article offers a focused conceptual synthesis of peer-reviewed research across banking, audit, information systems, and financial regulation, using Chinese sector indicators as contextual motivation rather than causal evidence. The contribution is a use-case grounded translation of permissioned-DLT design choices into assessable compliance dependencies for banks, auditors, and supervisors, clarifying why blockchain adoption in banking should be treated as a redesign of evidence and governance rather than as a plug-and-play IT upgrade.