The role of blockchain in reshaping payment systems and banking services

Abstract

There is growing interest in using blockchain technology to overcome the flaws of legacy payment systems and banking operations, few empirical efforts have examined the possible use of blockchain by large institutions. The study examines how blockchain is changing the payment systems and banking services with a focus on Citigroup (Citi) and various Citi blockchain projects, specifically Citi Token Services. The study aims to assess the impact of blockchain’s adoption on efficiency, cost reduction, customer confidence and service accessibility. A quantitative research study was conducted in a longitudinal design, and data were analysed using multiple linear regression in the SPSS program from 2020–2024 to check the relationship between variables. The results indicate that blockchain implementation offers considerable transaction speed, operational and transactional cost reduction (up to 80 percent), increased customer trust and broader service access with 24/7 transactions. The regression model explains 51.9 percent of the variance in performance. Although promising, blockchain for banking is still in its infancy and facing a variety of challenges that need to be solved for wider application, such as scalability, regulatory compliance, and integration with existing systems.