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Analysis of the Impact of Blockchain Technology on Traditional Financial System - Taking Project Agora as an Example

Author(s)

Miao Zou, Qianxin Zhao

Affiliation(s)

School of Economics and Management, Shanghai University of Political Science and Law, Shanghai, China

Abstract

In the global macroeconomic environment characterized by deep integration of the digital economy and financial technology, the development and application of blockchain technology present both opportunities and challenges for traditional financial systems. This paper studies the Project Agora, we see its foundational background, analyze the usage of distributed ledgers, smart contracts, and tokenized asset technologies in traditional financial system, and testy the technical feasibility on using atomic settlement in dealing with cross-border payment delays and risks. Blockchain applications have positive effects on commercial bank liquidity management,central bank monetary policy transmission,and real firm operations, at the same time, due to the changes of banks' microstructure, new risks of cross-injection, endogenous risks of technology, integration vulnerability of infrastructures, cross-border regulatory friction and institutional conflicts occur. The author thinks that we can lower down the risks from four sides. Firstly, building suitable regulatory frameworks; Secondly, promoting digital transformation in commercial banks; Thirdly, building multi-level risk control systems; Fourthly, strengthening international regulatory cooperation and privacy compliance practices. All methods can provide a solid socioeconomic and legal foundation for future new technological applications.

Keywords

Blockchain Technology; Project Agora; Distributed Ledger; Smart Contract; Tokenized Assets

References

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