In this paper, we evaluate the economic value of a blockchain application. In the context of asset-backed securities (ABS) issuance in China, where some ABS are issued with blockchain technology and others are not, we find that the use of blockchain significantly reduces the coupon yield at issuance. Compared with other ABS, those issued using blockchain technology experience a decrease of 31.4 basis points in the yield spread, which corresponds to a relative decrease of 13%. We further document that the effect of blockchain is more pronounced for ABS deals rated by less reputable credit rating agencies and agencies that rely more on issuers for their rating business, for revolving ABS, and for ABS with a larger number of underlying assets. We also find that the use of blockchain can reduce the level of retained interest and number of credit enhancement mechanisms. This paper contributes to the literature by providing a small-sample analysis of the economic value of a blockchain application in financial markets. This paper was accepted by Brian Bushee, accounting. Funding: X. Chen and Q. Cheng acknowledge funding provided by the Lee Kong Chian Professorship at Singapore Management University. This work was supported by Singapore Ministry of Education [Grant MOE-T2EP40120-0005]. Supplemental Material: Data are available at https://doi.org/10.1287/mnsc.2023.4671 .
Marinela Mircea, Marian Stoica, Bogdan Ghilic-Micu
Most countries in the world are currently faced with a series of public procurement challenges. Moreover, the large volumes of public procurement and the impact it may have of the global economy, the environment and the society at large justify a research study aimed at achieving sustainable and smart procurement. Smart public procurement intensively relies on emerging technologies and it is both an international priority and a challenge to achieve it. This paper is aimed at addressing such procurement-specific challenges. This study reflects the current status and the trends in public procurement, as well as the manner in which Blockchain and the Internet of Things (BIoT) may lead to a beneficial change in the field. In order to analyse the impact of BIoT, we are putting forward an assessment model comprising the definition and the description of six hypotheses. They are validated both by reference to the current knowledge status and via the analysis of the data collected in a survey which was conducted in Romania. It was aimed at collecting and analysing the data from the main stakeholders as well as at formulating recommendations/actions related to the modernisation of the current system. The study uses structural equation modelling (SEM) to validate the proposed model and to establish the relationships between the adoption of BIoT and smart, sustainable and transparent public procurement. At the same time, we analyse the links between the adoption of BIoT and aspects such as corruption and fraud, the challenges related to technological integration and the need to reengineer organisations, as well as national and international policies. Following our analyses, there emerged that BIoT adoption has a positive impact on the achievement of sustainable public procurement processes (the highest effect), on transparency and the trust in public procurement, on reducing corruption and fraud in public procurement and on the achievement of smart public procurement. The paper provides theoretical and practical contributions that should support solutions to the current major challenges and represent a vehicle for innovation and sustainable development alike.
Recent literature has addressed initial coin offering (ICO) projects, which are an innovative form of venture financing through cryptocurrencies using blockchain technology. Many features of ICOs remain unexplored, leaving much room for additional research, including the success factors of ICO projects. We investigate the success of ICO projects, with our main purpose being to identify factors that influence a project's outcome. Following a literature review, from which several potential variables were collected, we used a database comprising 428 ICO projects in the banking/financial sector to regress several econometric models. We confirmed the impacts of several variables and obtained particularly valuable results concerning project and campaign variables. We confirmed the importance of a well-structured and informative whitepaper. The proximity to certain markets with high availability of financial and human capital is also an important determinant of the success of an ICO. We also confirm the strong dependency on cryptocurrency and the impact of cryptocurrency valuations on the success of a project. Furthermore, we confirm the importance of social media in ICO projects, as well as the importance of human capital characteristics. Our research contributes to the ICO literature by capturing most of the success factors previously identified and testing their impacts based on a large database. The current research contributes to the building of systems theory and signaling theory by adapting their frameworks to the ICO environment. Our results are also important for regulators, as ICOs are mainly unregulated and have vast future potential, and for investors, who can benefit from our analysis and use it in their due diligence.
Blockchain is an emerging technology that is used to address ownership, centrality, and security issues in different fields. The blockchain technology has converted centralized applications into decentralized and distributed ones. In existing sharing economy applications, there are issues related to low efficiency and high complexity of services. However, blockchain technology can be adopted to overcome these issues by effectively opening up secure information channels of the sharing economy industry and other related parties, encouraging industry integration and improving the ability of sharing economy organizations to readily gain required information. This paper discusses blockchain technology to enhance the development of insurance services by proposing a five-layer decentralized model using Ethereum platform. The Najm for Insurance Services Company in Saudi Arabia was employed in a case study for applying the proposed model to effectively solve the issue of online underwriting, and to securely and efficiently enhance the verification and validation of transactions. The paper concludes with a review of the lessons learned and provides suggestions for blockchain application development process.
I examine the style and skill of small, medium, and large Bitcoin traders using order book data from the largest U.S.-based exchange, Coinbase. I find that all but the smallest traders are contrarian---they buy when prices have fallen and vice versa---and the larger the traders, the more contrarian they are. Additionally, large Bitcoin traders anchor to the 30-, 90-, and 120-day highs. On the other hand, smaller investors mainly trade based on investor sentiment and attention. Decomposing the order flows, I find that contrarian trades positively predict Bitcoin returns, and consistently, larger traders who are contrarian on average show evidence of market timing skills. On the other hand, sentiment- and attention-induced trading, which are mainly implemented by smaller traders, have no predictive power for returns. Overall, the results are consistent with larger traders being compensated for providing liquidity to smaller investors’ sentiment and attention-driven trades.
This is a capstone project summary of an in-depth market analysis titled how DeFi transforms the Banking Industry. Decentralized finance (DeFi) is an open and global financial system built for the internet age. There are limitations on the existing banking system, and DeFi has potential to solve those pain points. Various fintech companies in Asia have leveraged permissioned blockchain for financial services solutions with enhanced security and efficiency. The future DeFi will continue to shape the banking system for better service, and for a wider population.
Digital assets are changing the way businesses think about equity, labor, business models, and business organization. Digital assets, like Bitcoin or Ethereum, provide incredible opportunities to further align shareholders with the objectives of the entity. Each time humanity advances its technology for ledgers, markets explode, and we witness immense wealth creation. Digital assets like Bitcoin and Ethereum are the next great step forward for ledger technology. While there are incredible opportunities to leverage this new technology, there are also incredible risks. There are many public examples of “hacks” of prominent blockchains like Ethereum and Solana. Blockchain technology has captured the imagination of the public. Blockchain, therefore, must develop a robust security system and intelligently distribute and limit liability for institutional and retail investors to reap the rewards of public attention. Part of the risk that comes from digital assets is its newness. Blockchains that run smart contracts have many incredible uses that could eliminate middlemen in many industries. But courts are yet to develop case law surrounding smart contracts. The way that smart contracts self-execute presents a new question which courts must address: how should a court allocate risk between two smart-contracting parties? No matter how the courts decide, the market needs an answer. This article attempts to explore some of the opportunities in digital assets and how these opportunities are fundamentally different from their traditional equivalents.
Digital currency, which is a kind of digital token that exists on a distributed and decentralized ledger, is under the spotlight of the public's discussion. Chinese government desires to promote the establishment of a currency service system that is oriented to the digital economy era, which is beneficial to the public, and universally innovative and open. This essay introduces the reasons that the Chinese government aims to promote a new type of digital RMB, and the disadvantages the digital currency is facing now such as regulatory problems compared with existing third-party payment methods and the impact of the promotion of digital currency on third-party payment. To solve these problems, this study focuses on the integration of third-party payment and digital currency, the traffic of third-party payment and digital currency users, and the security of the blockchains. This study aims to solve the practical problems which the digital currency might face and help to promote the development of digital RMB.
Blockchain has been posed as a revolutionary technology. Its application is diametrically opposed to the centralized conventional mechanisms. However, it would appear that blockchain has only been able to have a significant impact on payment mechanisms and financial transactions. Blockchain technology went on to revolutionize the financial industry with the advent of Bitcoin in 20081. However, many within the legal and business fraternity believe that smart contracts will outsize the disruption caused by crypto-currency and believe that smart contracts will reinvent the way businesses and people alike enter into transactions2. The purpose of this paper is two pronged: first, to analyse the use of smart contracts to understand if its positives outweigh its negatives or viceversa and analyse how this technology can benefit India; and second, to analyse the legal recognition and enforceability of smart contracts in India while drawing from the regulatory experiences of other jurisdictions, with a focus on the experience of the United Kingdom.
The article provides a first critical exam of the approach taken by EU Regulators and Courts regarding cryptoactivities. The purpose of this analysis is to see if a new European regulation on “encrypted” financial services will really be born. The analysis begins with the definition and regulation of Cryptocurrencies, the best of which are probably found in the opinions of supervisory and regulatory bodies. Italian courts dealing with this difficult subject show uncertainty among assets (beni), money (valuta), and financial products. Today the reflection of both Regulators and Courts is expanding from cryptocurrencies to the wider and even more indefinite area of the so-called crypto-assets. In this regard, the most recent and important element is given by the European Commission Proposal of September 24, 2020, concerning regulation of crypto-asset markets (Regulation on Markets in Crypto-assets, MiCA). The proposed regulation should apply to crypto-asset issuers, as well as to providers of crypto-asset services on the territory of the European Union. Also in this case, the definition of “cryptoasset” is crucial. New rules provide a fairly generic definition as “digital representations of value or rights that can be transferred or stored electronically using distributed ledger or similar technologies”. To obviate the vagueness of the definition, the only possibility seems to be moving by subtraction, i. e., listing a series of “tools” to which the proposed regulation does not apply, even though these may fall, in theory, in the broad definition of “crypto-asset”.
María Camila Bermeo-Giraldo, Alejandro Valencia-Arias, Orfa Nidia Patiño-Toro
Resumen.Este estudio tiene como objetivo identificar los factores asociados a la inversin en criptomonedas en Millennials aplicando 136 encuestas llevando a cabo bajo un anlisis factorial exploratorio, con un enfoque cuantitativo y alcance exploratorio-descriptivo.El anlisis de los datos recolectados se realiz midiendo el grado de asociacin entre los constructos del modelo conceptual propuesto y mediante el coeficiente V de Cramer para el contraste de hiptesis.Los resultados validaron el modelo propuesto para explicar la intencin de invertir en criptomonedas por parte de los Millennials.Se evidencia que hay una fuerte relacin entre los factores facilidad percibida de uso y confianza percibida; utilidad percibida con facilidad de uso percibida y facilidad de uso percibida con la actitud de uso de los Millennials frente a las criptomonedas.De igual manera, se observ Factores asociados a la inversin en criptomonedas en Millennials Iberoamrica, 2022, nm. 1, pp. 38-61 39 una asociacin intermedia entre los factores actitud de uso, confianza y seguridad percibida y el factor intencin de uso.
A smart Ponzi scheme (SPS) is a financial Ponzi scheme that is implemented and deployed in blockchain through smart contract technology. It is built on treachery and lies, by which, the organizers and speculators jointly deceive innocent investors by fostering a belief in obtaining the expected benefits. The occurrence of SPSs is originated from the vulnerability of the supervision mechanism on the blockchain. Although there are many excellent studies, these contributions overemphasized the methods themselves, did not describe the characteristics of the SPS well, and had certain limitations in practice. We made a thorough study on the characteristics of an SPS and brought out the vital features to identify an SPS for an investor. Based on the analysis of the contributions of predecessors, we propose an approach to test whether a contract is an SPS. This approach could deal with two situations, the contracts to be deployed and the long-run contracts respectively. Of the approach, the priori method can be exploited to distinguish whether the contract to be deployed is an SPS for the runner of a blockchain; the posterior method could protect an investor from being trapped in a fraud. At the same time, the posterior method can also be extended to monitor some contracts dynamically to alert users with the probability to be fallen into SPSs.
Abstract Financial regulation has changed significantly in the 10 years since the global financial crisis. Tougher, more detailed and more complex standards now apply to all aspects of regulation. In more recent times that regulation has been increasingly influenced by the widespread deployment of fintech introducing new services and applications whilst transforming how consumers interact with the more traditional existing banking services. This chapter introduces the context and focus of this most recent regulatory and supervisory authorities and highlights some of the key regulatory initiatives, existing and ongoing, designed to manage the key risks posed by the disruptive nature of the rapid digital transformation occurring in the sector. Technologies designed to sup-port aspects of these regulations are highlighted as part of practical guidance to support innovators in the sector and for those in the sector considering developing or deploying the increasing plethora of new applications utilizing emerging technologies like AI or distributed ledger technologies.
The healthcare sector is suffering from inefficiencies in handling its data. Many patients and healthcare organisations are frustrated by the numerous hurdles to obtaining current, real-time patient information. Patients are also frustrated at trying to schedule appointments at health organisations that have outdated contact information. The healthcare sector’s attention has been drawn to blockchain technology as a part of the solution, especially since this technology has been successfully applied in the financial sector to improve the security of transactions. The aspect of interoperability is resolved adequately by blockchain technology, because it has the potential to store, manage and share EMRs safely in the healthcare community. Therefore, the technology is having a positive impact on healthcare outcomes for various stakeholders. Interoperability in healthcare eases the exchange of health-related data, such as EMRs, between healthcare entities so that records may be shared and distributed among clinical systems. To handle data in this sector without violating privacy is a challenge, whether in the collection, storage, or analysis. Poor security, which increases data breaches, endangers patients both mentally, socially, and financially. A lack of data-sharing in the healthcare sector is considered a significant issue worldwide. This research focuses on this gap by investigating the benefits of using blockchain at the Ministry of Health in Saudi Arabia, providing a detailed analysis of the healthcare sector, and evaluating how blockchain technology improves data-sharing security. This research proposes a framework that identifies the factors supporting data-sharing using blockchain among healthcare organisations. It has three categories: healthcare systems factors; security factors; and blockchain factors. A triangulation technique achieved reliable results in three steps: a literature review; an expert review; and a questionnaire. This gave a comprehensive picture of the research topic, validating and confirming the results. To construct the framework, factors were comprehensively extracted from the literature then analysed, cleared of duplicates, and categorised. As a result, the final framework is confirmed as being based on the literature and expert review, and it is supported by the practitioners’ survey.
The healthcare industry faces serious problems with health data. Firstly, health data is fragmented and its quality needs to be improved. Data fragmentation means that it is difficult to integrate the patient data stored by multiple health service providers. The quality of these heterogeneous data also needs to be improved for better utilization. Secondly, data sharing among patients, healthcare service providers and medical researchers is inadequate. Thirdly, while sharing health data, patients' right to privacy must be protected, and patients should have authority over who can access their data. In traditional health data sharing system, because of centralized management, data can easily be stolen, manipulated. These systems also ignore patient's authority and privacy. Researchers have proposed some blockchain-based health data sharing solutions where blockchain is used for consensus management. Blockchain enables multiple parties who do not fully trust each other to exchange their data. However, the practice of smart contracts supporting these solutions has not been studied in detail. We propose CrowdMed-II, a health data management framework based on blockchain, which could address the above-mentioned problems of health data. We study the design of major smart contracts in our framework and propose two smart contract structures. We also introduce a novel search contract for searching patients in the framework. We evaluate their efficiency based on the execution costs on Ethereum. Our design improves on those previously proposed, lowering the computational costs of the framework. This allows the framework to operate at scale and is more feasible for widespread adoption.