TITLE:
Blockchain and the Banking Sector: Benefits, Challenges and Perspectives
AUTHORS:
Tudor-Gabriel Budisteanu
KEYWORDS:
Crypto, Blockchain, Financial, Banks
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.13 No.3,
March
17,
2025
ABSTRACT: The banking sector, being essential to the global economy, has benefited from significant technological advancements in recent decades. However, it continues to face structural challenges such as high costs, dependence on centralized intermediaries, and security risks. In this context, blockchain has emerged as a disruptive technology, promising to fundamentally transform financial infrastructure. Defined by characteristics such as decentralization, immutability, and security, blockchain offers a modern alternative to traditional centralized systems, ensuring transparency, cost reduction, and the automation of complex processes through smart contracts. Beyond its evident advantages, such as lower operational costs, enhanced efficiency in cross-border payments, and increased transaction security, blockchain technology also significantly contributes to financial inclusion by providing banking access to underbanked populations. However, its large-scale adoption is limited by challenges such as scalability, underdeveloped regulatory frameworks, and complex infrastructure requirements. Studies have shown that hybrid blockchain models, which combine the transparency of public blockchains with the control of private platforms, may represent the optimal solution for integrating this technology into the banking sector. This paper explores the evolution of blockchain, its practical applications in the financial domain, and the challenges associated with its implementation. The conclusions highlight the need for standardization, investments in infrastructure, and collaboration between financial institutions and regulatory authorities to enable the gradual and efficient adoption of this revolutionary technology.