Tracing the Evolution of Blockchain-Based Banknote Supply Chain: A Path Dependency Perspective

The banknote supply chain is an indispensable and integral part of modern-day financial system by ensuring an adequate supply of bills in circulation to meet market demands. This is accomplished through the detection of counterfeit banknotes, the destruction of damaged bills and the issue of new currency to replace those which have been destroyed. Yet, established models of banknote supply chain, which are governed centrally by a keystone actor in the form of the central banking authority of a country, suffers from problems of operational efficiency. The emergence of blockchain as a distributed technological infrastructure has the potential of disrupting how banknote supply chains are configured. Through an in-depth case study of how the banknote supply chain in the People’s Republic of China has evolved from a centralized governance architecture to one that is founded on distributed responsibilities among banking institutions, we are able to draw on path dependency theory to generate insights into inter-organization mechanisms that not only reinforce and break conventional paths pursued by focal supply chain actors, but also create new paths for the collective body. In this sense, our study not only offers practical insights into how blockchain technology can be harnessed to revolutionize the banknote supply chain underpinning financial markets, but it also contributes to theory development by being the first to illustrate how definitive characteristics of blockchain technology can influence the evolutionary trajectory of these markets.

Professor Chee-Wee Tan

Chee-Wee Tan is a Professor w/ Special Responsibilities in Research Excellence at the Department of Digitization in Copenhagen Business School (CBS). He holds a PhD in Business Administration from the University of British Columbia (Canada) as well as Master of Science and Bachelor of Science degrees from the National University of Singapore (Singapore). His primary research interests focuses on design and innovation issues related to the delivery of digital services in various contexts (e.g., e-business, e-commerce, e-government, e-health, e-marketplace and m-commerce). Particularly, he is interested in discovering how value can be extracted from digital services and exploring ways by which contemporary technological trends (e.g., big data, gamification and social media) can contribute to the design of innovative services. Chee-Wee currently serves as an Associate Editor for Internet Research (IntR), Journal of Management Analytics (JMA) and MIS Quarterly (MISQ). In addition, Chee-Wee is also serving as an Advisory Board Member for Industrial Management & Data Systems (IMDS) and has served as Guest Editor for special issues at Decision Support Systems (DSS) and JMA. Chee-Wee is a past recipient of the Outstanding Associate Editor Award for services rendered to MISQ.

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