Tokenization and the banking system: Redefining authority in the blockchain era

Abstract

In the rapidly evolving realm of financial technology, blockchain integration has catalyzed transformative changes. This study delves into the intricate relationship between traditional banks and the blockchain technology. Drawing from the perspectives of International Political Economy (IPE) and Science and Technology Studies (STS), this study understands the blockchain technology through the lens of infrastructure, where power dynamics are constantly shaped by the entity wielding the strongest agency. This analysis delves into how traditional banks strategically leverage blockchain not only for technological integration but to exert control. Grounded in the concept of “power of social interaction,” this study reveals how and why banks secure a central position within this evolving infrastructure, dynamically influencing the interplay between technology and financial institutions. A focal point of this exploration is the tokenization process, which illustrates how banks actively engage with blockchain, seamlessly integrating it into their structures to shape the infrastructure narratives. By contributing insights into the implications of blockchain adoption by traditional banks, this study enhances understanding of power dynamics within financial infrastructures and their transformative potential, underscoring the process of infrastructuring governing the endeavor to attain a central position within an infrastructure.