Journal of Applied Finance & Banking

Blockchain and Decentralized Finance in Fintech Startups in Emerging Markets: A Systematic Literature Review of Opportunities and Challenges

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• Abstract

  
  

  This study examined the role of blockchain technology and decentralized finance (DeFi) in the growth of fintech startups within emerging markets, while also exploring challenges hindering blockchain adoption. Guided by two objectives, to assess blockchain and DeFi’s contributions to fintech development and to identify adoption barriers, the research employed a systematic literature review of 46 peer-reviewed articles published in English within the last decade. Sources were drawn from reputable databases. A quality assessment checklist ensured the validity and relevance of selected studies, and thematic analysis aligned findings with the research questions. Results revealed five key benefits of blockchain and DeFi for fintech startups: fostering innovative business models, reducing transaction costs, and expanding access to capital through tokenization. However, several challenges persist, including regulatory uncertainty, technological and cost barriers, privacy and data security concerns, limited inter-organizational trust, resistance to change, and scalability issues. This study contributes to the finance and banking literature by synthesizing evidence on blockchain’s potential to transform fintech ecosystems in emerging markets. The findings suggest that clear regulatory frameworks and strengthened technological infrastructure are critical to facilitating blockchain adoption. Limitations include the study’s cross-sectional design and focus on emerging markets, indicating the need for further empirical research.

   

  JEL classification numbers: G20, G23, O16, O33.

  Keywords: Blockchain technology, decentralized finance (DeFi), fintech startups, emerging markets, adoption challenges, tokenization, transaction costs, transparency, innovation.