Blockchain technology is gaining popularity in the financial sector and specifically in banking. Its implementation will result into increased transparency and reduced cost. Distributed ledger technology (DLT) is primarily a payment system that is well adopted by the financial sector and will have significant impact on future of banking. The purpose of the study is to identify whether this novel technology is good enough to replace and compete with the traditional financial system. The current study followed the umbrella review limiting the studies based on blockchain, DLT, and banking from 2015 until today published in Scopus-indexed journals. The study concludes that there is evidence of adoption of blockchain technology in banking sectors around the globe, but there is still need to explore the application of blockchain in banking, and there is a need to overcome the challenges faced in implementation of blockchain in the banking sector.
TopIntroduction
Blockchain technology is also known as the “next-generation Internet” (Shermin, 2017) and a “foundational technology” (Lele, 2019) having the ability to transform transactions, impact in what way individuals interrelate in the economy, and even transform society. It is expected to revolutionise a wide range of operations, from government, healthcare, manufacturing to finance and beyond, according to analysts.
It is frequently referred to as a disruptive, “game-changing” breakthrough, with some arguing that its lasting impact may be even greater than that of the “World Wide Web or Internet media” (Gleim & Stevens, 2021). Despite the widespread interest and acceptance of blockchain technology, numerous applications have raised concerns. Many digital currencies such as Bitcoin have been described as “solutions in search of a problem,” whether they are distributed autonomous organisations which exists on upper position of blockchain structure or ICO (Initial Coin Offerings) which use current digital tokens to attract fund (Matzutt et al. 2018).
Some critics have warned that embracing such a technology transition could attract criminal behaviour, if not opening the door for disorder, then at the very slightest fueling the growth of authoritarianism.
Contrary to the existing basic technologies (such as the Internet), the existing basic technologies used by established international organizations and alliances (such as 7 Internet Society, 6 ICANN, 5 W3C, 4 Internet Governance Forum, IETF etc.) are disordered at finest. There is no structure for reaching consensus, resolving differences and coordinating actions. Reasonably, it may affect the future of adoption and application of blockchain which in increasing presently. Additionally, it brings substantial risk for users and arouses increasing concerns from regulators, especially in the financial sector. In the service sector, the stability and confidence of financial services are threatened. The environment of taxation concerns is the most important.