Evaluating the Implications of Private Blockchain Banking Infrastructure on Federal Reserve Monetary Policy Transmission and Intraday Liquidity ManagementEvaluating the Implications of Private Blockchain Banking Infrastructure on Federal Reserve Monetary Policy Transmission and Intraday Liquidity Management

• Abiodun Okunola

  Ladoke Akintola University Technology

  Author

The intersection of private blockchain-based banking infrastructure and central bank monetary policy represents a critical frontier in financial stability research, yet systematic evaluation of systemic risk implications remains nascent. This study investigates how the integration of private blockchain infrastructure into U.S. banking operations affects Federal Reserve monetary policy transmission mechanisms and intraday liquidity management. Employing a mixed-methods design combining retrospective data analysis with prospective simulation, the research evaluates the operational efficiency, monetary policy transmission fidelity, and systemic risk profile of tokenized banking architectures. Findings indicate that blockchain-based settlement infrastructure achieves 89.4% operational efficiency gains in intraday liquidity utilization while maintaining monetary policy transmission integrity under normal conditions. However, stress scenario simulations reveal that the removal of settlement frictions introduces novel systemic risk channels, with 24/7 continuous settlement accelerating contagion propagation by 47% in adverse market conditions. The study contributes a validated analytical framework for evaluating private blockchain infrastructure's systemic implications, offering actionable guidance for policymakers navigating the trade-off between operational efficiency and financial stability. Implications extend to Federal Reserve discount window operations, intraday credit facilities, and the evolving architecture of U.S. payment systems.

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Copyright (c) 2026 Abiodun Okunola (Author)

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