The nexus of blockchain and governance: A use case of blockchain on trade finance

Abstract

Having both opportunities and threats, blockchain is a game-changer disruptive innovation in our time. It keeps penetrating a wide scope of areas including banking, insurance, supply chain, trade finance, agriculture, etc. We explore this multifaceted technology as the first building block of our study. As a second building block, we focus on the governance concept and then we analyze the nexus of blockchain and governance. Our study contributes to the extant scarce literature by covering the recent developments on the subject. Following Liu, Lu, Yu, Paik, and Zhu (2022) we conduct our study through several steps. The literature review of our study is based on Web of Science and Google Scholar academic databases. Studies are selected according to the predefined inclusion and exclusion criteria. The review period of the study is the last five years. According to our analysis, we detect a literature gap between on-chain and off-chain governance. We believe our study contributes to filling this gap. We propose a recipe to the argument of Kaufman, Heister, and Yuthas (2021) that suggest blockchain technology has failed to produce promised benefits for enterprise networks despite its potential. Considering the increasing importance of trade finance especially during and afterward the COVID-19 pandemic, we bring forward our solution by employing a real use case of trade finance. During this effort, we explore XinFin and XinFin Digital Contract (XDC) as an example that can create added value from micro and macroeconomic perspectives simultaneously. Our future research will base on blockchain governance practices in specific sectors.