Blockchain Technology Empowering the Reform Practice in Traditional Finance: A Literature Review

Abstract

Blockchain technology, the bedrock innovation in the digital economy, is steadily reengineering the operational logic of the traditional financial system. Harnessing its core attributes of decentralization, immutability, and transparency, it is making profound inroads. This paper undertakes an all-encompassing and systematic review of relevant literature from both domestic and international sources. It particularly focuses on the empowerment routes by which blockchain technology can fuel the reform of the traditional financial setup, thus furnishing theoretical support and practical blueprints for financial systemic revamp. Blockchain technology yields numerous advantages. It significantly boosts payment efficiency, slashes costs, and vigorously promotes financial inclusion. Moreover, it augments regulatory transparency and alleviates information asymmetry. However, several hurdles remain, such as scalability glitches, security threats, and regulatory compatibility issues. This research not only enriches the FinTech knowledge pool but also steers financial institutions in their digital transformation endeavors, enabling them to render more efficient and inclusive services. Going forward, future work should concentrate on technological innovation and regulatory adaptation to fully realize the potential of blockchain in the financial sector.