Revolutionising Financial Markets: The Role of AI and Blockchain in Modern Trading

Abstract

The rapid evolution of digital technologies has significantly transformed the structure and functioning of global financial markets. Among these innovations, blockchain technology has emerged as a pivotal force driving a paradigm shift in modern trading practices. This study critically examines the role of blockchain in reshaping trading ecosystems, focusing on efficiency, transparency, security and trust in financial transactions. Blockchain based systems, including decentralised exchanges and smart contracts, facilitate secure, automated and transparent trade execution, thereby enhancing operational efficiency and reducing reliance on centralised intermediaries. Furthermore, blockchain technology underpins the development of Decentralised Finance (DeFi), fostering more inclusive, accessible and transparent trading environments. This paper provides a comprehensive analysis of current applications, technological advancements, and practical implementations of blockchain across financial markets. It also critically evaluates key challenges, including scalability constraints, regulatory ambiguities, interoperability issues and cybersecurity concerns. By synthesising existing literature and empirical findings, the study highlights the transformative potential of blockchain in redefining digital trading infrastructures. It further identifies future research directions and strategic opportunities that may shape the next generation of financial market innovation.