ROLE OF CRYPTOCURRENCY AND BLOCKCHAIN TECHNOLOGY IN MODERN FINANCIAL MARKETS

Abstract

The cryptocurrency and blockchain have become the forces of change in the current financial markets, radically questioning the design of classic finance and bringing fresh paradigms of decentralisation, transparency, and programmable trust. This paper examined how cryptocurrency and blockchain technology are influencing the modern financial markets with the focus on the lived experiences, perceptions, and insights of the participants of the modern financial markets on these new technologies. A qualitative exploratory research design was used in the study. The semi-structured interviews with eight purposely chosen participants (including coded cryptocurrency investors, business students and participants with first-hand experience using blockchain-based systems and decentralised financial systems) were used to gather data. The interviews have been performed through the online channels and thematically examined in accordance with the six-step model of Braun and Clarke. The analytical process identified four main themes that are financial transparency, and efficiency of transactions, institutional trust and risks. The results showed that the participants thought that the blockchain technology has the inherent potential to improve financial transparency and speed of transactions due to its immutable distributed registry structure, and at the same time they recognized that there were great risks in terms of price volatility, regulatory uncertainty, cyber vulnerability and speculative market behaviour. The paper has found that cryptocurrency and blockchain are a real and expanding structure force in the contemporary financial markets- a force whose untapped potential is limited by the lack of effective regulatory frameworks and its institutional adoption by many institutions. There are implications to financial regulators, institutional investors, and practitioners in the educational field.