A Socio-Technical Theory of Blockchain Alignment Under Institutional Fragmentation

Blockchain technologies are frequently associated with decentralization, disintermediation, and systemic disruption. Yet adoption outcomes across sectors and jurisdictions remain highly uneven. Existing scholarship explains these outcomes primarily through technological capability, innovation diffusion, or market incentives, but lacks an integrated framework capable of explaining how blockchain infrastructures evolve within fragmented institutional environments. This paper develops the Blockchain System Alignment Framework (BSAF) as a socio-technical theory of blockchain alignment under conditions of institutional fragmentation. The framework argues that blockchain adoption and infrastructural scaling depend on conjunctural alignment across three interdependent dimensions: technical viability, institutional compatibility, and economic incentive coherence. Rather than conceptualizing blockchain as an inherently disruptive technology, the paper argues that blockchain systems become system-reconfiguring only when governance structures, interoperability conditions, and stakeholder coordination mechanisms evolve in mutually reinforcing ways. Drawing on comparative institutional analysis across stablecoins and central bank digital currencies (CBDCs), tokenized asset markets, and blockchain-enabled supply chains, the paper demonstrates how fragmented governance regimes, standards competition, and asymmetrical incentive structures shape adoption trajectories across domains. The analysis further shows that blockchain infrastructures not only operate within fragmented institutional environments but may also generate new forms of fragmentation through competing standards, governance architectures, and coordination asymmetries. The paper contributes to socio-technical transition theory, institutional political economy, and digital infrastructure studies by reframing blockchain as a conditional coordination infrastructure embedded within evolving governance systems rather than as a universally transformative technology. More broadly, the findings suggest that the future trajectory of blockchain infrastructures will depend less on technological performance alone than on the capacity of institutions, governance regimes, and stakeholders to coordinate under conditions of geopolitical and institutional fragmentation.