International Journal of Science, Engineering and TechnologyAuthors: S Sri Sivani, Bopanna K D, Uday Kiran, Dr. Abhijit Chakraborty
Abstract: Blockchain technology has emerged as one of the most disruptive innovations in the global financial system since the launch of Bitcoin in 2009 and Ethereum’s smart contracts in 2015. By November 2025, it powers live institutional platforms processing trillions in annual volume and supports 49 central bank digital currency (CBDC) pilots, including India’s e₹, China’s e-CNY, and multi-jurisdictional projects like BIS mBridge. It delivers improved security through cryptographic finality, near-instant transaction settlement, radical transparency via immutable ledgers, operational cost reductions of up to 83 % in cross-border payments, and decentralized financial services that extend credit and payments to 1.4 billion unbanked individuals via stablecoins and DeFi. Simultaneously, financial institutions and regulators grapple with complex challenges: data privacy conflicts between permanent public ledgers and laws like GDPR, persistent cybersecurity risks in smart contracts and bridges, regulatory uncertainty across fragmented jurisdictions (MiCA in Europe vs. U.S. patchwork vs. India’s crypto-tax regime), interoperability gaps among thousands of siloed chains, and evolving AML/KYC and consumer-protection requirements. This study comprehensively examines blockchain applications in banking and payments, trade finance, lending, capital markets, insurance, and RegTech, while critically analyzing the major regulatory hurdles shaping adoption trajectories. Drawing on secondary data from central bank reports (RBI, BIS, PBoC), financial institutions (JPMorgan Kinexys, BlackRock BUIDL), peer- reviewed blockchain research, and global regulatory bodies (FATF, IMF, G20), the analysis reveals that, despite proven technical maturity and $33 billion in tokenized real-world assets, blockchain’s transformative potential hinges on balanced, harmonized regulations, global standardization efforts, and continued technological readiness to ensure both innovation and systemic stability.
