Distributed Ledger Technology in Financial Transactions: A Mechanism-Oriented Review of Architecture, Risk, and Governance

Distributed Ledger Technology in Financial Transactions

DOI

10.2991/978-94-6239-830-6_9How to use a DOI?

Keywords

distributed ledger technology; blockchain; financial transactions; tokenisation; smart contracts; zero-knowledge proofs; interoperability

Abstract

Distributed ledger technology (DLT) is increasingly being considered for payment, settlement, asset registration, and compliance processes. However, much of the existing discussion remains project-centred and offers limited explanation of why similar technologies produce different outcomes across public, consortium, and permissioned systems. This review develops a mechanism-oriented framework that connects ledger architecture with financial function, risk transmission, and governance design. A structured review and comparative case analysis are used to examine consensus, smart contracts, oracles, zero-knowledge proofs, and cross-ledger interoperability. The findings show that consensus design shapes settlement finality and accountability; programmable execution can reduce reconciliation but also converts specification and oracle errors into immediate operational losses; privacy-enhancing proofs can support selective compliance; and interoperability may widen liquidity access while introducing bridge, finality, and legal-mapping risks. DLT creates value when a shared record is tied to enforceable off-chain rights, custody duties, validator responsibilities, and workable intervention procedures. It should therefore be understood less as a substitute for financial intermediaries than as a coordination infrastructure for regulated multi-party transactions.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Juan Wang
AU  - Li Wang
PY  - 2026
DA  - 2026/11/14
TI  - Distributed Ledger Technology in Financial Transactions: A Mechanism-Oriented Review of Architecture, Risk, and Governance
BT  - Proceedings of the 6th International Conference on Internet Finance and Digital Economy (ICIFDE 2026)
PB  - Atlantis Press
SP  - 105
EP  - 114
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-830-6_9
DO  - 10.2991/978-94-6239-830-6_9
ID  - Wang2026
ER  -