Blockchain-based Solutions for Cryptocurrency Regulations: A Systematic Literature Review

Blockchain is a decentralized public ledger that underpins digital transactions such as cryptocurrencies. This study examines blockchain-based solutions for cryptocurrency regulation and their effectiveness in enhancing transaction security. A structured search strategy was applied across a few major academic databases, yielding 597 initial records, of which 23 met the final inclusion criteria for detailed analysis. The paper makes three main contributions: (i) a conceptual mapping of blockchain based regulatory mechanisms, including compliance automation, privacy preserving KYC and threshold signature models; (ii) the identification of six key challenges: scalability, legal uncertainty, privacy, interoperability, user adoption, and limited empirical validation; and (iii) a research agenda prioritizing empirical evaluation and cross-jurisdictional harmonization. Findings show a surge in publications from 2020–2024 and highlight a geographic concentration of contributions from India. The review also shows that most proposed regulatory frameworks remain largely conceptual, with limited real world deployment or user centered evaluation. While many studies focus on cryptography and smart contract mechanisms, far fewer examine how these systems are actually adopted by end users. This highlights the need to incorporate Human Computer Interaction (HCI) principles such as interface transparency, usability, and behavioral compliance into the design of blockchain-based regulatory mechanisms, ensuring they are both technically robust and practically usable.