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Funds Routing System: an accountable fund allocation mechanism

Monsberger, Rodolfo José (2020) Funds Routing System: an accountable fund allocation mechanism. Masters thesis, Dublin, National College of Ireland.

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Abstract

Agency problems have been subject of analysis in recent decades and continue to represent a challenge from an academic and technological point of view when it comes to finding potential solutions able to decrease information asymmetries. Lack of transparency and information generates mistrust and alters risk perceptions. These are dissuasive factors for business which can also derive in resources misallocation and assets mispricing. On the other hand, blockchain technology eliminates intermediaries, verification procedures, and reconciliations. It also provides a single version of transactional history broadcasted in realtime to all interested stakeholders and thereby reducing information gaps. The current study aims at examining whether blockchain technology and smart contracts help reduce credit risk by providing greater accountability regarding funds allocation. To this end, a Funds Routing System (FRS) was designed based on an escrow mechanism which exploits main advantages of this new technology. The first prototype proves to ensure targeted funds allocation and simultaneous information sharing among stakeholders. Main findings show FRS is a particularly useful tool for donors, investors, lenders, or any entity transferring funds to a third party which has great discretionary power in terms of funds management. In addition, its flexible and simple architecture foresees a user-friendly interface able to operate with different platforms and applicable in different economic sectors. It represents a window of opportunity for complementary developments which can provide a more comprehensive approach for other dysfunctional factors and market failures explained in the agency theory, such as adverse selection.

Item Type: Thesis (Masters)
Subjects: Q Science > QA Mathematics > Electronic computers. Computer science
T Technology > T Technology (General) > Information Technology > Electronic computers. Computer science

Q Science > QA Mathematics > Computer software
T Technology > T Technology (General) > Information Technology > Computer software
Divisions: School of Computing > Master of Science in FinTech
Depositing User: Dan English
Date Deposited: 29 Jan 2021 17:03
Last Modified: 29 Jan 2021 17:03
URI: http://norma.ncirl.ie/id/eprint/4572

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