American Journal of Business and Operations Research AJBOR 2692-2967 2770-0216 10.54216/AJBOR https://www.americaspg.com/journals/show/3512 2018 2018 University of Al-Qadisiyah, Diwaniyah City, Iraq Laith Laith This research explores the great potential of blockchain based smart contracts in Iraq’s financial and banking sector. It looks into how this technology can improve financial operations by automating transactions and reducing operational cost, increasing transparency, and reducing intermediaries. The research also tackles the challenges of adoption such as lack of digital infrastructure and lack of legal frameworks and cybersecurity risks. The findings show that smart contracts can lead to higher operational efficiency and more strategic flexibility for financial institutions in Iraq. Therefore, the research recommends developing digital infrastructure and establish comprehensive regulatory frameworks to support smart contracts and digital transformation in the financial and banking sector according to international standards. 2025 2025 52 61 10.54216/AJBOR.120204 https://www.americaspg.com/articleinfo/1/show/3512