Cryptocurrency as a Disruptive Force in Traditional Banking: Opportunities and Challenges

Abstract

Cryptocurrency has become a new form of money that threatens the existing banking systems around the world. Under this, the study seeks to find out the opportunities and risks that cryptocurrency presents in the traditional banking sector, especially regarding the role of trust, regulatory guidance, CE, and adoption rates in different financial centers. A cross-sectional survey design was employed, targeting financial professionals and stakeholders in four major financial hubs: New York, London, Singapore, and Frankfurt. The data were obtained from structured online questionnaires and interviews. The level of trust in cryptocurrencies and adoption rates were compared using descriptive statistics and correlation analysis. The study also revealed that there were regional differences in trust and adoption and that Singapore had the highest levels of both because of the right regulatory environment and technological development. A positive relationship between trust and adoption was established, meaning that improved regulatory environments increase trust and hence adoption. They also showed that although cryptocurrencies are seen as an activity that can coexist with traditional banking, these issues as regulatory and security issues, are still critical at the regional level. The findings of this research are that, even though cryptocurrencies are seen as an addition to the conventional banking system, their use is highly dependent on the legal framework and development of technology. We sit perpetually on the edge of the unknown, stepping forward only if financial institutions and policymakers can plan how to systematize the risks and take advantage of the opportunities of Cryptocurrency and blockchain technology.