aspg-1-3512-1791417737 20261008000217 American Scientific Publishing Group admin@americaspg.com American Scientific Publishing Group American Journal of Business and Operations Research AJBOR 2770-0216 2692-2967 2025 12 2 Laith Haleem Al-Hchemi University of Al-Qadisiyah, Diwaniyah City, Iraq 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 32 39 3512 https://creativecommons.org/licenses/by/4.0/ 10.54216/AJBOR.120204 https://www.americaspg.com/journal/1/article/3512 https://www.americaspg.com/storage/articles/manuscripts/01M07TSKM0XXX3094NS4R9H54W.pdf