This article explores the multifaceted implications of using blockchain technology to manage financial transactions, focusing on both its advantages and associated risks. As decentralized, cryptographically secured systems, blockchains offer transformative potential for the financial sector by enhancing transaction transparency, reducing operational costs, and eliminating the need for intermediaries. The article examines the core features of blockchain, such as distributed ledger architecture, consensus mechanisms, and immutability, and evaluates their applicability to financial services, including payments, settlements, remittances, and smart contract execution. Simultaneously, the paper critically analyzes risks related to cybersecurity, regulatory uncertainty, scalability, and energy consumption. Drawing on global case studies, pilot projects, and scholarly research, the article highlights the trade-offs that financial institutions and policymakers must consider when integrating blockchain into mainstream financial systems. The conclusion provides policy and strategic recommendations for maximizing benefits while mitigating systemic and operational vulnerabilities.

Blockchain technology, financial transactions, distributed ledger, cryptocurrency, smart contracts, cybersecurity, decentralization, transparency, financial innovation, regulatory risks.

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