Keywords
Abstract
This study examines the dual impact of blockchain technology on financial system stability through comprehensive theoretical and empirical analysis. The findings reveal that blockchain delivers significant improvements in transaction efficiency (70% enhancement), transparency (55% gain), and counterparty risk reduction (51% decrease) through applications in cross-border payments, supply chain finance, and financial inclusion. However, these benefits are counterbalanced by substantial risks including technical vulnerabilities, evidenced by exchange breaches averaging $1.8 billion annually, and systemic risk contagion, demonstrated by the Terra ecosystem collapse affecting $60 billion in market value. Regulatory challenges persist, with anti-money laundering effectiveness at only 23% compared to 65% in traditional banking. The study proposes a tiered regulatory framework differentiating applications by systemic importance, internationally coordinated technical standards, and enhanced public-private cooperation mechanisms. Future research should prioritize quantum-resistant cryptography and macroeconomic implications of widespread adoption to ensure sustainable blockchain integration that enhances rather than undermines financial stability.