FinTech Disruption: The Impact of Digital Payment Systems on Global Financial Stability

Linda Ayu Oktoriza, Deni Riani, Dian Safitri Pantja Koesoemasari

Abstract


The rapid expansion of digital payment systems has significantly transformed the global financial landscape, introducing both opportunities and challenges for financial stability. This study examines the impact of digital payment systems on financial resilience, regulatory effectiveness, and systemic risk management. Using a qualitative research approach, the study synthesizes data from international financial institutions, peer-reviewed journals, and policy reports to analyze key factors influencing financial stability. The findings indicate that digital transactions enhance efficiency, financial inclusion, and transparency while simultaneously introducing risks such as cryptocurrency volatility, regulatory fragmentation, and threats to traditional banking institutions. The study also highlights the role of central banks and regulatory authorities in mitigating systemic risks through policies such as central bank digital currencies and risk-based regulatory frameworks. Given the evolving nature of FinTech and financial digitalization, it is crucial for policymakers to establish adaptive regulatory mechanisms that balance innovation with financial security. Future research should further explore the long-term macroeconomic effects of digital payment adoption and the effectiveness of various regulatory strategies in maintaining global financial stability.

Keywords


FinTech; Digital Payment Systems; Financial Stability; Cryptocurrency Volatility; Regulatory Frameworks

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DOI: https://doi.org/10.15548/al-masraf.v10i1.1672

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