ABSTRACT
The finance industry has been one-sided since inventing blockchain technology for fiat (fiat currency is not backed by a commodity such as gold and silver), and cryptocurrency. Although the advent of blockchain technology took place in 2008 with the introduction of Bitcoin, the technology is greatly misunderstood as a facilitator of cryptocurrency-based transactions only. This fallacy must be resolved. While digital currency is very widespread and deeply associated with blockchain technology, the technology is useful in all aspects of the finance industry. This chapter focuses on the lack of regulations surrounding digital assets that threaten the global financial sector. It delves into the challenges that lawmakers currently face to properly enforce the regulation of digital assets. Then, how blockchain can be an effective solution in eradicating digital asset exploitation that includes cybercriminal activities, money laundering, and terrorist financing is discussed. The impact of financial crimes on economies is outlined, and a conceptual framework is constructed by the authors to show how blockchain technology would theoretically and practically operate in the finance industry. The construct of the framework is divided into three sections: the physical layer, the current layer, and the blockchain layer for simplifying the integration of blockchain technology in the finance sector. Next, the application of blockchain technology in the finance industry is discussed in detail with the inclusion of rich case studies to support the benefits of blockchain technology in the finance sector. The chapter concludes with thoughtful highlights of the chapter and an inclusive exercise to develop further thoughts on blockchain technology.
