The Role of Smart Contracts and Blockchain in Developing Financial Trust

Abstract

This paper does an in-depth analysis of how blockchain technology and smart contracts instill public confidence in the banking industry. For a very long time now, trust in monetary transactions has been cemented through honest businesses and a regulated intermediary. As it would later turn out, blockchain technology provides an un-hackable, transparent, and decentralized basis upon which trust is built. In this bid to cut the involvement of third parties, this study analyzes to what extent blockchain technology and smart contracts facilitate a shift in trust to programmable contracts. Basically, this essay goes into detail about how blockchain technology and smart contracts can be applied with a view to reconsidering the very concept of trust. This study adopted a mixed-method approach in order to determine useful use cases and evaluate their contribution toward data security, transaction speed, and making sure of confidence. Case studies that are included in this study include but are not limited to JP Morgan's Quorum blockchain technology. According to many studies, blockchain technology cuts transaction costs by enhancing security and transparency, hence encouraging innovation in new financial services and products. This page contributes to the growing debate on decentralized technology through the provision of relevant insight into the legislators, regulators, and financial institutions leading this technological revolution.