Web3 and Decentralized Applications (dApps) in Digital Banking Transformation

Mathew, Prakash (2025) Web3 and Decentralized Applications (dApps) in Digital Banking Transformation. World Journal of Advanced Research and Reviews, 26 (2). pp. 3501-3509. ISSN 2581-9615

This article explores the potential of Web3 and decentralized applications (dApps) to revolutionize digital banking. It explores how blockchain technology transforms traditional banking through distributed ledger systems that enhance transparency, security, and user autonomy. The technical architecture of Web3 banking solutions is detailed, including blockchain networks, smart contracts, and emerging applications like decentralized lending protocols, cross-border payment systems, and asset tokenization. While these technologies address significant limitations in conventional banking systems, such as excessive fees, settlement delays, and centralized control, challenges persist in regulatory compliance, scalability, interoperability, and user experience. The integration of artificial intelligence and quantum-resistant cryptography represents promising developments that could further enhance decentralized financial systems. As the blockchain ecosystem matures, financial institutions that embrace these technologies stand to gain competitive advantages through operational efficiencies and enhanced customer value.