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Blockchain Technology in Modern Banking

p>Research Article | Volume 6, Issue 1 | Article 9 | 2026

The Role of Blockchain Technology in Modern Banking

Strengthening Security, Transparency, and Trust through Distributed Ledger Applications

Authors: Vanshika Thakur1, Gosala Raju2

  1. Research Scholar, Guru Ghasidas Vishwavidyalaya, Bilaspur, Chhattisgarh, India.
    E-mail: vanshika.180899@gmail.com
  2. Assistant Professor, Guru Ghasidas Vishwavidyalaya, Bilaspur, Chhattisgarh, India.
    E-mail: gosala.raju39@gmail.com

APA Citation:
Thakur, V., & Raju, G. (2026). Blockchain technology in modern banking: Strengthening security, transparency, and trust through distributed ledger applications. Bank and Policy, 6(1), 107–119. https://doi.org/10.56334/bpj/6.1.9

Received
08 October 2025		 Accepted
22 January 2026		 Published
2026		 DOI
10.56334/bpj/6.1.9

Keywords: Blockchain Technology; Banking; Distributed Ledger Technology; Financial Innovation; Security; Transparency.

Abstract

The rapid digitalization of banking has increased the demand for secure, transparent, and trustworthy financial transaction systems. Conventional banking infrastructures remain vulnerable to data breaches, fraud, limited transparency, and operational inefficiencies associated with transaction verification and reconciliation. Blockchain technology, through its Distributed Ledger Technology (DLT), offers a decentralized and tamper-resistant framework capable of addressing many of these challenges. This study employs a secondary research methodology by systematically reviewing peer-reviewed journal articles, reports published by international financial institutions, and documented industry applications of blockchain technology in the banking sector. The study evaluates how the fundamental characteristics of blockchain—including decentralization, immutability, cryptographic security, and consensus mechanisms—enhance transaction security, operational transparency, and institutional trust. Furthermore, the paper examines the application of blockchain technology in payment systems, interbank settlement, auditing, regulatory compliance, and financial governance while identifying key implementation challenges, including scalability, regulatory uncertainty, interoperability, and compatibility with legacy banking systems. The findings indicate that blockchain technology possesses significant potential to transform modern banking transactions by improving security, transparency, and efficiency, provided that appropriate regulatory frameworks and institutional readiness are established.

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Ethics Statement

This study was conducted in accordance with accepted principles of academic integrity and research ethics. The research relied exclusively on publicly available secondary sources and did not involve human participants, animals, or confidential personal data. Therefore, ethical approval and informed consent were not required.

Acknowledgments

The authors gratefully acknowledge the academic support provided by the Department of Commerce, Guru Ghasidas Vishwavidyalaya. They also thank colleagues and academic peers whose constructive comments and scholarly discussions contributed to the improvement of this manuscript.

Conflict of Interest

The authors declare that they have no known competing financial interests or personal relationships that could have influenced the work reported in this manuscript.

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