Dynamic effects of blockchain on financial markets: evidence from TVP-Bayesian VAR with a connectedness approach

The study analyzes the impact of blockchain adoption in the financial markets in Montenegro. Specifically, we study the connectedness of macroeconomic variables, financial markets, foreign direct investments (FDI), and main financial stability indicators. Contrary to assumptions, the adoption and transition in the short run is a painful process. In the medium run, blockchain technology absorbs an enormous amount of FDI. We conclude that adoption apparatus policies should not be based only on conventional assumptions and reveal the mechanism of key gaps by a prudential authority.