Abstract

Blockchain technology is considered to have a high impact on the banking industry due to its potential to enable new ways of organizing and handling banking industry activities. It reduces costs and time associated with intermediaries and improves trust and security. This study explores how blockchain technology could enhance fund transfer transactions between local banks in Egypt by providing a blockchain-based framework to conduct instant payments and financial transactions. Due to its properties, blockchain is qualified to play a vital role in the financial sector by helping financial institutions protect their daily routine financial transactions with a more secure, instant, and low-cost model. The findings show that blockchain technology’s characteristics (enhanced security, transparency, data integrity, information immutability, and instant settlement) and using open Application Programming Interface (API) architecture will give seamless integration of financial services and applications. This approach will improve Egypt’s financial transactions between local banks as well as the growth of e-payments and digital transformation. The proposed framework, which uses blockchain and open banking API architecture in fund transfer between local banks, will provide a great opportunity and space for banks to improve and positively impact digital transformation strategy, financial inclusion, digitization of payments, online SME finance, increasing access points, partnerships with FinTech’s, and using innovative technologies further to bring efficiency in banking and payments. By using a blockchain network for domestic remittance Automated Clearing House (ACH), banks should be able to offer customers a faster, cheaper, and more efficient service.