IMPLEMENTATION OF BLOCKCHAIN TECHNOLOGY IN THE CONTEXT OF IMPROVING THE EFFICIENCY AND SECURITY OF BANKS
Abstract
The experience of applying blockchain technologies in international practice shows that they have a wide potential for various fields of activity. In particular, nowadays the use of blockchain technologies is one of the most innovative and promising trends in the financial market. The open and decentralized nature of the blockchain allows for a reduction in transaction costs, making financial transactions more transparent and secure. In recent years the development of Ukraine's financial sector has been in line with global trends, despite of the risks and threats posed by the full-scale military operations. Innovations are changing the direction of financial market development and helping to solve certain problems in the functioning of banking systems. Blockchain technology is becoming increasingly widespread in the financial sector due to its obvious advantages, which allow for more efficient execution of certain transactions, including payments, and ensure an adequate level of system and data protection. At the same time, we believe that its implementation in the activities of financial intermediaries is associated with a number of challenges, including cyber threats, instability of blockchain-based digital financial instruments, and regulatory risks. The article identifies that the motivations that may encourage banks to implement blockchain in their business processes are efficiency, security, autonomy, and control. We have determined how the main characteristics of the blockchain (reliability, transparency, confidentiality, unregulated nature, cyber vulnerability, technological complexity, etc.) will facilitate or impede the implementation of these motives. It can be argued that the use of blockchain technology in banking has significant prospects and they largely depend on the effectiveness of the decisions made by legislators and regulators on the formation of a regulatory framework for the use of blockchain technology and digital assets based on it by financial intermediaries.
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