Leading general-purpose technologies that have since utterly transformed the world include steam engines, electric power, information technology, internet technology, and Artificial Intelligence (AI). And blockchain is just added to that list, Bagis (2023). Blockchain technology is at the forefront of digitalization and financial transformation.

The technology is leading a major financial transformation. After all, in addition to the past few centuries’ primary general-purpose technologies (GPTs), including the blockchain revolution of the past few decades, there were mainly three major revolutions in the past 50-to-60 years (Bagis, 2023):

• introduction of the internet and the new era of communication technologies,
• the early 2000s and the rise of social networks, smartphones, etc.,
• The pandemic and the third digital revolution (zoom, online shopping, etc.).

The epicenter of all these transformations, though, is the digital transformation. The need for a strong and secure digital infrastructure, digital and financial literacy, privacy protection measures, and inclusive digital public infrastructures (as in the Turkish e-Devlet) is eminent. Digitalization, therefore, requires a holistic approach even in the design stage.

Bitcoin and other digital currencies have propagated a new era of digital payment networks, which are basically verified over a new technology called blockchain. Hence, the new trend of digital currencies and financial transformation… Digital currencies are a good example of a new era of digital revolution.

The global economy is going through a fast digitalization process. The Covid pandemic of 2020 was a turning point in this digitalization and digital transformation process. The global economic, financial, and social connectivity have improved thanks to digitalization, and developments in ICTs.

There is surely still too much room for innovation and development when it comes to digitalization or digital currencies. For instance, AI could be more effectively used to improve and fasten credit rationing, accounting, and credit score evaluations. It could also help personalize financial services, in particular for those with limited financial literacy.

The rise of e-commerce and digital payment technologies, coupled with blockchain technology, has led to the emergence of digital currencies, much more efficient payment technologies, and further financial innovations. The financial system will also be much simpler, as it gets digitalized.

Cryptocurrencies and the blockchain technology have already transformed payment systems and the global financial system. Hence, the digital currencies are leading the contemporary major financial transformation era. Blockchain technology could even potentially replace internet technology.

Digital currencies combine the privacy of physical central bank money and the convenience of electronic private bank money. They improve digitalization and financial innovation, particularly by improving the efficiency of domestic or international financial systems and multilateral payment systems.

DeFi (decentralized Finance), for example, is the new modern crypto-type transformation in financial markets and financial services such as borrowing, lending, and trading. It eliminates banks, brokerage, and other intermediaries to avoid huge commissions and fees. Transactions will be enabled via smart contracts.

Digitalization and the need to increase financial efficiency even in public services is indisputable. Sovereign governments aim to utilize the technology behind digital currencies and have hence even come up with their sovereign digital currencies. Developing economies, particularly, are rising as leaders in this new era of digitalization and digital currencies.

Digital transformation has even turned into a necessity for companies, institutions, and even national economies, as they all feel the need to follow the ongoing trend. For central banks and their national economies, looking forward, search for alternatives to the existing reserve currencies is further dominating this trend.

The world is undergoing an era of major financial transformation. And digital currencies, blockchain technology are pioneers of this ongoing transition period. Yet, the digitalization and structural transformation process should also be compatible with green transformation targets.

As a matter of fact, digital currencies could also enable easier access to popular green finance options. Using digital currencies in projects related to sustainability and green finance initiatives could help deal with financing issues. Yet they need to be regulated, the risks should be mitigated, and they should serve the sustainable development goals.

No doubt, financial transformation should mean more effective and efficient use of blockchain technology in finance. Just as it is in the case of FinTechs, new payment systems, CBDCs, cryptocurrencies, etc. Contributions of quantum computers and space technologies to automation in areas such as finance should also be noted.

Digitalization of global economy was always prevalent, considering the modern electronic currencies and all other FinTechs (new apps, tokens, trading platforms, electronic payment systems such as Visa, Troy etc.). Rise of crypto and digital technologies, introduction of blockchain technologies, post the 2008 Crisis and in particular the Pandemic has fast accelerated this digital transformation trend.

Use of quantum computers in optimization is also becoming increasingly widespread. It is, therefore, of great importance not to be late in investing in this new quantum computer technology too. It might even allow very time-consuming and energy-consuming operations such as crypto mining to be carried out in a much shorter time.

The need to improve cross-border payment efficiency, accommodating digitalization, revivification of competition in the payment systems, the tokenization trends, and revivifying weak financial inclusion (as well as the institutional adjustments to the new era) are all raising interest in the CBDCs.

Yet, the window of opportunity might even close very soon. Türkiye and other newly emerging economies should not miss the opportunity to become a pioneer or leading country in blockchain technology and other technologies that start with it. New players should increase their effectiveness before the opportunity window narrows.

Meantime, there are also numerous crypto-related issues to deal with. The problems imposed by decentralized financial technologies and digital currencies are worth contemplating. As another example, cryptocurrencies need also find alternative ways to minimize their huge energy consumption to run their ledgers continuously.

References

Bagis, B. (2025). Digital Currencies and Financial Transformation. In: Gün, M., Kartal, B. (eds) Machine Learning in Finance. Contributions to Finance and Accounting. Springer, Cham. https://doi.org/10.1007/978-3-031-83266-6_2

Bagis, B. (2023). “Could Blockchain Be a Real Game Changer?”, PoliticsToday (January 26, 2023). Link: https://politicstoday.org/could-blockchain-be-a-real-game-changer/