Digging into Primary Financial Market: Challenges and Opportunities of Adopting Blockchain

TL;DR

This paper investigates the challenges and opportunities of implementing blockchain technology in the primary financial market through empirical interviews and surveys with industry participants.

Contribution

It provides an empirical analysis of the main difficulties faced by primary market participants in adopting blockchain technology, highlighting specific challenges like due diligence and monitoring.

Findings

Identified key challenges: complex due diligence, mismatch, monitoring difficulties

Used a hybrid qualitative and quantitative research approach

Provided insights for future research on blockchain in primary markets

Abstract

Since the emergence of blockchain technology, its application in the financial market has always been an area of focus and exploration by all parties. With the characteristics of anonymity, trust, tamper-proof, etc., blockchain technology can effectively solve some problems faced by the financial market, such as trust issues and information asymmetry issues. To deeply understand the application scenarios of blockchain in the financial market, the issue of securities issuance and trading in the primary market is a problem that must be studied clearly. We conducted an empirical study to investigate the main difficulties faced by primary market participants in their business practices and the potential challenges of the deepening application of blockchain technology in the primary market. We adopted a hybrid method combining interviews (qualitative methods) and surveys (quantitative methods) to conduct this research in two stages. In the first stage, we interview 15 major primary market participants with different backgrounds and expertise. In the second phase, we conducted a verification survey of 54 primary market practitioners to confirm various insights from the interviews, including challenges and desired improvements. Our interviews and survey results revealed several significant challenges facing blockchain applications in the primary market: complex due diligence, mismatch, and difficult monitoring. On this basis, we believe that our future research can focus on some aspects of these challenges.