Blockchain Papers

David Krause

No abstract is available for this record.

Adil Maqsood

Stablecoins digital assets designed to maintain a stable value by referencing a fiat currency or other reserve asset have moved from a niche instrument for crypto-exchange settlement to a systemically relevant layer of global financial infrastructure. As of mid-2026, the total stablecoin market capitalization stands at roughly $310–320 billion, concentrated overwhelmingly in two U.S. dollar-referenced tokens, Tether's USDT and Circle's USDC, which together account for approximately 80–83% of supply. This thesis examines the stablecoin sector across five interlocking dimensions: (1) the market structure and competitive dynamics among major issuers, including USDT, USDC, PayPal's PYUSD, First Digital's FDUSD, Ripple's RLUSD, and a fast-growing cohort of emerging entrants such as USD1, Ethena's USDe, and Sky's USDS; (2) the regulatory architecture now taking shape in the United States (the GENIUS Act and the pending CLARITY Act), the European Union (MiCA), Singapore (the MAS stablecoin framework), and other jurisdictions; (3) the parallel and often competing rise of central bank digital currencies (CBDCs); (4) the tokenization of real-world assets (RWAs), which is extending stablecoin-adjacent infrastructure into Treasuries, credit, and money-market funds; and (5) the practical adoption of stablecoins in cross-border payments, decentralized finance (DeFi), and institutional treasury and settlement operations. The analysis draws on issuer attestations, on-chain analytics platforms (DefiLlama, rwa.xyz, Artemis), central bank and BIS publications, and law-firm and industry research to provide a fact-based, source-grounded account of where the stablecoin sector stands and where the principal points of tension—reserve transparency, monetary sovereignty, and interoperability are likely to shape its next phase of growth.

Augustin Gridel

The choice-of-law solutions governing the proprietary aspects of bearer financial securities were long marked by great simplicity. When securities were embodied in a paper instrument, applying the law of the place where that paper instrument was located gave the conflict of laws a foreseeable and internationally uniform solution. The dematerialisation of these securities and the advent of distributed ledger technology have rendered that solution obsolete, while the new connecting factors based on the location of the account-keeping intermediary afford no real satisfaction. This article takes stock of these connecting factors and proposes another : that of the securities delivery system operated by the central securities depository.

A. Joseph Warburton

Tokenized deposits—commercial bank deposits represented as transferable digital tokens on distributed ledgers—are no longer hypothetical. Major U.S. banking institutions are deploying them at institutional scale, but the legal framework governing them has not kept pace. The GENIUS Act of 2025 recognizes that tokenized deposits are bank deposits governed by banking law rather than by the Act’s stablecoin framework. Yet tokenized deposits differ from conventional deposits in important respects: they are programmable, can settle atomically on distributed ledgers, and may be transferred by artificial intelligence agents acting without contemporaneous human intervention. The existing legal framework, including the Electronic Fund Transfer Act (EFTA), UCC Article 4A, and the FDIC’s resolution architecture, was not designed for these features. This Article identifies three consequential gaps in that framework and proposes targeted reforms to address them. First, the EFTA’s authorization framework does not clearly address smart-contract-governed transfers or AI-agent-initiated payments, leaving liability allocation uncertain. Second, Article 4A’s acceptance-based finality regime does not map cleanly onto on-chain settlement, creating uncertainty regarding payment finality, discharge, and error allocation. Third, smart-contract execution creates novel challenges for FDIC receivership, including asset transfers that continue after a bank’s failure. For each gap, the Article proposes reforms directed to the appropriate actor: congressional amendments to the EFTA, Uniform Law Commission amendments to UCC Articles 4A and 3, and FDIC rulemaking addressing resolution and recordkeeping, including a shadow ledger mandate and a regulatory kill switch for permissioned networks. Together, these reforms adapt existing law to govern a new mode of payment without displacing the banking framework that makes it trustworthy.

Gina-Gail S. Fletcher, Veronica Root Martinez, Steven L. Schwarcz

Traditional financial systems rely on a dense network of intermediaries—banks, brokers, exchanges, and clearinghouses—that not only facilitate transactions but also serve as compliance gatekeepers. By implementing capital adequacy rules, disclosure regimes, and anti-money laundering and know-your-customer conventions, these entities constrain opportunism, provide reliable recordkeeping, and enable regulators to monitor systemic risk. Decentralized finance (“DeFi”) disrupts this model by replacing intermediaries with smart contracts: self-executing digital agreements that automatically perform transactions on blockchain or other encrypted computer code. While proponents tout DeFi as a more efficient and “purer” form of finance, its disintermediation eliminates the chokepoints that historically enabled oversight and consumer protection. As a result, DeFi magnifies familiar risks that fueled the Great Depression and the 2008 Global Financial Crisis, while also introducing novel vulnerabilities tied to computer code, governance, and cross-border anonymity. This Article argues that because DeFi platforms disaggregate traditional intermediary functions, effective regulation must focus on (i) embedding compliance safeguards directly into platform design and (ii) holding accountable the actors who build, operate, and maintain those platforms. These safeguards are essential to preserve market integrity, mitigate systemic risk, and protect investors in the absence of conventional intermediaries. Specifically, regulators should develop reforms that require platforms to incorporate technological and governance tools that replicate the critical compliance and risk-management functions historically supplied by intermediaries. Constructing such a regulatory regime will require substantial multijurisdictional coordination, both in harmonizing regulatory expectations and in building cross-border enforcement capacity. Fortunately, a range of existing international coordination mechanisms can be leveraged to facilitate this global effort.

Steven L. Schwarcz, Regis Bismuth, Anne-Catherine Muller, Anne-Claire Rouaud · 17 authors

No abstract is available for this record.

David Krause

The prohibition of interest-bearing stablecoins marks a critical juncture in digital asset regulation, exposing fundamental tensions between financial innovation and systemic stability. This paper provides the first comparative legal and financial analysis of the European Union's Markets in Crypto-Assets Regulation (MiCA) and the United States' GENIUS Act of 2025, examining how two major jurisdictions reach convergent prohibitions on yield-bearing stablecoins through markedly divergent regulatory architectures. While both frameworks forbid direct interest payments to holders, they diverge sharply in their treatment of decentralized finance (DeFi) protocols, reserve composition requirements, and supervisory allocation. The paper advances three interconnected contributions: (1) a technical examination of reserve management mechanisms and their implications for run dynamics; (2) a scenario-based stress test identifying contagion pathways from stablecoin markets to traditional banking systems; and (3) an analysis of the "DeFi gap," the substantial regulatory perimeter failure whereby third-party protocols offer functionally equivalent yields outside statutory prohibitions. With stablecoin market capitalization exceeding $300 billion, rivaling the deposit bases of mid-sized national banking systems-the regulatory treatment of these instruments will determine whether they evolve as competitors to traditional banks or as complementary infrastructure within a restructured financial system.

David Krause

This paper examines how the rapid growth of real-world asset (RWA) tokenization interacts with decentralized finance (DeFi) to create new channels of systemic risk. By early 2026, tokenized RWAs had reached an estimated $36 billion in value, concentrated primarily in private credit and U.S. Treasury exposures, and are increasingly serving as collateral in on-chain lending and stablecoin structures (RWA.xyz, 2026). The paper reviews the foundations of DeFi and the role of stablecoins, then analyzes the TerraUSD and USD Coin episodes as early examples of peg instability and cross-market contagion between crypto and traditional finance (Bank for International Settlements, 2023; Financial Stability Board, 2023). It develops a risk taxonomy for tokenized RWA markets covering liquidity, oracle, collateral, legal, and contagion risk, and explains how leveraged looping amplifies shocks in collateralized lending protocols (Acemoglu et al., 2015; Gai & Kapadia, 2010). The paper then uses the First Brands Group bankruptcy and associated fabricated receivables as a case study of liquidity illusion, credit fraud, and on-chain fire sales in tokenized credit pools (ABF Journal, 2026). It concludes by discussing emerging regulatory responses and design principles intended to mitigate these vulnerabilities. The analysis underscores that RWA tokenization can improve capital efficiency but simultaneously creates a transmission belt that propagates offchain credit stress into DeFi liquidation cascades.

Gavin Persaud

This paper provides a comprehensive examination of stablecoins, a class of cryptocurrency designed to mitigate the price volatility inherent in major digital assets like Bitcoin and Ethereum. By pegging their value to stable assets such as fiat currencies, commodities, or through algorithmic manipulation, stablecoins aim to serve as a reliable medium of exchange, unit of account, and store of value within the digital economy. Through systematic literature review methodology, this research traces the evolution of stablecoins, dissects their underlying mechanisms, and categorizes them into four primary types: fiat collateralized, commodity-collateralized, crypto-collateralized, and algorithmic. The paper analyzes their expanding use cases, from powering decentralized finance (DeFi) and revolutionizing cross-border payments to enhancing corporate treasury functions, while scrutinizing the significant risks they present, including de-pegging events, regulatory uncertainty, and systemic financial risks. The catastrophic collapse of the Terra/LUNA ecosystem serves as a critical case study, offering profound lessons on the vulnerabilities of algorithmic models. The research navigates the complex global regulatory landscape, comparing approaches from major jurisdictions including the United States GENIUS Act, European Union MiCA regulation, and UK FCA frameworks. By synthesizing market data, growth projections, and doctrinal analysis, this paper concludes with a forward-looking perspective on stablecoins' enduring role in the ongoing digitalization of finance and provides normative recommendations for balanced regulatory approaches that foster innovation while ensuring financial stability.

David Krause

The European Union's Markets in Crypto-Assets Regulation (MiCA) and the United States' GENIUS Act of 2025 both prohibit stablecoins from offering interest. However, this restriction has failed to curb the demand for yield on digital dollars. Instead, capital has migrated to functional alternatives, including decentralized finance lending protocols, offshore stablecoin issuers, and tokenized Treasury funds. This paper analyzes the economic impact of restricting yield in digital currency markets. It focuses specifically on tokenized Treasury funds, which are SEC-registered money market funds that now manage over $15 billion in assets. Because these funds offer blockchain-based yields, they compete directly with non-interest-bearing stablecoins for the same investors. This regulatory inconsistency creates a significant opportunity for regulatory arbitrage, raising significant questions about the coherence of current digital asset frameworks. Furthermore, data from the Council of Economic Advisers indicates that the macroeconomic benefits of banning stablecoin yield are modest compared to the associated welfare costs. The paper concludes by discussing the implications of these findings for future financial stability and policy design.

Hugo Muñoz Ureña

When a smart contract executes exactly as programmed, it can still fail to do what the parties actually agreed to. This paper examines a structural gap between legal contracts, written in ordinary language that tolerates ambiguity by design, and executable code, which cannot process ambiguity at all. Drawing on Accord Project's own teaching documentation, the paper shows that even the most influential open-source framework for smart legal contracts treats deliberately open legal standards, such as "in the receiver's opinion" or "force majeure," as simple binary variables, embedding legal indeterminacy into code without resolving it. This gap acquires particular urgency in South Korea, where a February 2027 deadline requires tokenized securities platforms to register under a new distributed ledger framework, amid technological fragmentation across at least five competing architectures and a "digital native" model in which the ledger itself, without a parallel central registry, becomes the sole legal record. The paper argues that closing this gap does not require new technology, but a governance requirement modeled on a well-established regulatory pattern found in civil aviation and other fields: certifying verifiable outcomes without prescribing the specific technique used to achieve them. It concludes with a concrete recommendation for Korea's forthcoming distributed ledger standard requirements guideline.

David Krause

The Digital Asset Market Clarity Act (CLARITY Act) represents one of the most consequential U.S. legislative efforts to establish a comprehensive regulatory framework for digital assets. As the bill advances through the legislative process, uncertainty surrounding its ultimate enactment remains significant. Rather than focusing on a binary prediction of passage or failure, this paper examines the market-structure implications of three plausible regulatory outcomes. Using a scenario-planning framework, the analysis explores how stablecoins, tokenized commercial bank deposits, decentralized finance (DeFi), and base-layer crypto commodities may evolve under alternative legislative and regulatory paths. The scenarios recognize that federal agencies, courts, financial institutions, and digital asset firms are already adapting their strategies in anticipation of divergent policy environments. Drawing on legislative records, regulatory filings, industry announcements, and legal scholarship, the paper identifies the principal opportunities, risks, and structural shifts associated with each scenario and assesses their implications for the future development of U.S. digital asset markets.

David Krause

The launch of World Liberty Financial (WLFI) in 2024 created a novel and unprecedented intersection between presidential political authority and the decentralized finance sector. This paper examines how the Trump family's crypto venture has grown through a combination of foreign sovereign capital, domestic regulatory rollback, and governance structures that concentrate control with project insiders despite public messaging centered on decentralization. Drawing on legal scholarship, on-chain financial data, and regulatory filings, the paper analyzes WLFI's governance token ($WLFI), its USD1 stablecoin, the Dolomite lending controversy, the Justin Sun litigation, and the Securities and Exchange Commission's dramatic shift toward non-enforcement under Chairman Paul Atkins's "Project Crypto" initiative. The paper also assesses proposed federal legislation that critics argue could codify favorable treatment for politically connected token issuers. An empirical event study of daily $WLFI returns from September 2025 to May 2026, benchmarked against Bitcoin, reveals negative cumulative abnormal returns around the Dolomite transaction and SEC settlement, and a positive reaction to the Justin Sun countersuit with unusually high trading volume. Taken together, these developments raise fundamental questions about market fairness, foreign influence, and the durability of investor protections in the digital asset space.

Takuya Kobori, James J. Angel

The integration of decentralized finance (DeFi) and traditional finance (TradFi) through fiat-backed stablecoins has created a composite financial system exposed to new channels of systemic risk. This Article analyzes how arbitrage breakdowns, synchronized outflows, and thinning liquidity can interact to amplify selling pressure and trigger regime shifts that spill into short-term funding markets. Building on ideas from traditional market structure and regulation, it translates familiar tools into seven design principles for minimizing tail risk and then examines the distinctive constraints that arise when those principles are implemented through DeFi architectures such as automated market makers, lending protocols, and bridges. Recognizing that core DeFi protocols often lie beyond direct supervisory reach, the Article advances a regulatory strategy centered on "connection conditions" at supervised junctions. By tying access to banks, custodians, and centralized exchanges to clear standards for governance, risk management, and architecture, this strategy combines benefits and constraints so that Law, Market, Norms, and Architecture work together to align profit-seeking with financial stability and to replace opaque de-banking with a transparent pathway for safe DeFi connectivity.

Filippo Caprioglio

No abstract is available for this record.

Seth Oranburg

The GENIUS Act's prudential framework protects against systemic risk that flows in one direction: from stablecoin failure into traditional banking risk. The empirical record of crosstagion, the bidirectional contagion between traditional finance and decentralized finance, demonstrates that the transmission channel runs the other way as well. When traditional financial stress destabilizes payment stablecoin reserves, as occurred when Silicon Valley Bank's failure briefly unpegged USD Coin in March 2023, the cascade into decentralized markets falls into a jurisdictional gap that neither GENIUS nor the CLARITY Act resolves. The Office of the Comptroller of the Currency owns the stablecoin issuer; the Commodity Futures Trading Commission owns the derivative markets where the cascade lands; and a depegged stablecoin may simultaneously fall under the Securities and Exchange Commission's jurisdiction as a potential investment contract under the Howey test. No statute allocates liability or mandates coordination among these three agencies when the transmission crosses their respective boundaries, and no mechanism exists for assigning jurisdictional primacy before all three assert competing claims. DAO governance failure compounds the problem by creating a distinct transmission mechanism operating at blockchain speed, with no identifiable counterparty and no circuit breaker. This Article argues that closing the crosstagion gap requires not new prudential requirements but a designated tri-agency coordination mechanism, triggered by observable stress indicators, that assigns jurisdictional primacy and activates a classification standstill before a crisis rather than after.

Andreas Park

This paper analyzes the institutional and organizational differences between traditional finance and decentralized finance (DeFi), with a focus on public, permissionless blockchains. In traditional markets, intermediaries provide custody, authentication, settlement, and regulatory compliance. By contrast, the option of self-custody and open access on blockchains fundamentally reshapes the organization of financial services and challenges the foundations of current regulatory approaches. These structural differences alter trading, lending, and derivatives markets while introducing risks such as smart contract failures and infrastructure concentration. At the same time, DeFi's openness reduces entry barriers, improves transparency and access, and fosters competition and efficiency. Because self-custody removes intermediaries as enforcement points, regulation cannot simply extend existing frameworks. I conclude with policy recommendations emphasizing self-custody rights, privacy protection, adaptive regulation, and integration pathways for traditional intermediaries.

Derek Maurice

Canada has emerged as one of the more proactive jurisdictions in regulating crypto asset trading platforms (CTPs), operating a dual-layer framework that requires compliance with both federal antimoney laundering obligations under the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and provincial securities laws administered by bodies such as the Ontario Securities Commission (OSC) and the Canadian Securities Administrators (CSA). This paper conducts a literature review of the existing academic and regulatory scholarship on Canada's crypto registration requirements, examining the development of this framework from 2014 to 2025. Drawing on peerreviewed scholarship in Canadian securities law, international comparative regulation, and decentralized finance governance theory, it explores the effectiveness of the pre-registration undertaking (PRU) system introduced in 2022-2023, the enforcement actions taken against noncompliant platforms, and the outstanding gaps in investor protection, particularly concerning decentralized finance (DeFi) and value-referenced crypto assets (VRCAs). The paper argues that while Canada's approach represents a meaningful advancement in crypto compliance infrastructure, significant regulatory fragmentation across provinces and the rapid pace of technological innovation continue to challenge the framework's adequacy. Implications for retail investor protection and the integration of crypto into the mainstream financial system are discussed.

Shashi Tiwari

Tokenisation has made substantial technical progress, yet tokenised securities remain peripheral to mainstream capital markets. This paper argues that the central problem is not whether distributed ledger technology can record and process issuance, transfers, pledges or lifecycle events. It can. The harder question is whether the resulting instrument is institutionally usable: capable of being held, settled, financed, serviced, risk-managed, reconciled and relied upon by issuers, investors, dealers, custodians, central securities depositories, auditors and market authorities. The paper develops a market-structure framework distinguishing four levels of record: technical state, operational record, authoritative market record and market utility. Technical state is what the ledger says. The operational record is what a platform or institution administers. The authoritative market record is the record that market actors can rely on for entitlement, transfer, custody, collateral and asset servicing. In legal language, this often corresponds to the legal register or account record; the broader market term is used here because capital-market adoption depends on more than formal legal validity. Market utility asks whether the instrument creates economic value at scale. The paper introduces the concept of Institutional Finality: the condition in which a financial record is not only technically valid, but relied upon across the full capital-market chain. Institutional Finality is broader than settlement finality. Settlement finality asks when a transfer is irrevocable and unconditional. Institutional Finality asks whether the relevant record can be used without bespoke reconciliation or exceptional explanation by the institutions through which markets operate. The paper analyses a recurring architecture in which a distributed ledger platform seeks to operate the primary digital record while an incumbent market infrastructure participates as access layer, validator, custodian, investor central securities depository or distribution channel. Such arrangements raise a record-authority problem: if the incumbent must enforce ledger state, the ledger has market-infrastructure consequences; if it need not, the ledger remains an operational record rather than the authoritative one. The paper labels the unstable form of this arrangement borrowed trust: a configuration in which the platform claims master-record status while the incumbent supplies institutional credibility without acquiring institutional control. The paper proposes a collateral-recognition test: where an asset is pledged or locked on-ledger, will the institutions controlling transfer, custody and settlement prevent inconsistent disposition of the asset? If yes, the ledger has genuine market effect. If no, or if the answer is uncertain, the tokenised asset may be useful for workflow automation but has not achieved Institutional Finality. The conclusion is asset-class specific. Tokenisation is most credible where it is anchored in an accountable record operator and where the authoritative record can be redesigned without disrupting established market infrastructure. Funds, loans and private credit are therefore more natural early candidates than mainstream bonds or listed equities. For mainstream securities, distributed ledger technology may add substantial value as workflow, lifecycle and collateral infrastructure, but claims to master-record status require a much stronger institutional and economic case.

Okello Aron

No abstract is available for this record.

Andrea Stazi, Riccardo Jovine

No abstract is available for this record.

tony hu

"Decentralization" in on-chain finance has become theater: a rhetorical banner that masks the competing forms of centralization actually governing protocol behavior, producing both judicial overreach (invalidated in Van Loon v. Department of the Treasury) and regulatory paralysis (the SEC's withdrawn investigation of Uniswap Labs). Drawing on Oliver Williamson's transactioncost theory of economic governance, this Article proposes a three-layer taxonomy of DeFi as three discrete structural equilibria: Layer 1 (crypto-native, corresponding to Williamson's market), Layer 2 (hybrid, tokenized voting and delegated authority), and Layer 3 (permissionedinstitutional, corresponding to Williamson's hierarchy)-operationalized through a multidimensional coding scheme covering validator concentration, governance entropy, asset whitelisting, user permissioning, dependency profile, and legal-entity exposure. The taxonomy is validated through a triple-event study of OFAC's 2022 sanctions on Tornado Cash, the 2023 district-court affirmance, and the 2025 delisting following the Fifth Circuit's reversal, using layershare time series constructed from DeFiLlama and RWA.xyz data. Activity redistributes across layers predictably under each shock-a pattern that a binary or spectrum framework cannot produce-and the mismatch between regulatory tools and governance forms is not a failure of agency imagination but the predictable cost of asking the wrong question; replacing "is this decentralized?" with "which layer is this?" converts the current enforcement impasse into a tractable matching problem between tool and tier.

Rahma Almheiri

This undergraduate capstone thesis examines the challenges and opportunities associated with the regulation and adoption of Decentralized Finance (DeFi) in the United Arab Emirates. Drawing on a qualitative analysis of regulatory documents, academic literature, and 13 semi-structured interviews with DeFi practitioners—including smart contract developers, compliance/AML experts, product managers, and blockchain specialists—the study investigates how the UAE’s multi-jurisdictional framework (VARA, ADGM, CBUAE, and SCA) shapes institutional confidence and market participation. Key findings reveal structural challenges stemming from DeFi’s decentralized, borderless, and pseudonymous nature, such as the absence of a central “off switch,” enforcement difficulties with KYC/AML and the FATF Travel Rule, consumer risks from smart-contract vulnerabilities and low financial literacy, and regulatory fragmentation across emirates. At the same time, experts identify substantial opportunities in cheaper cross-border remittances, real-world asset tokenization, SME financing through automated lending pools, and the UAE’s positioning as a global fintech hub. The research supports the thesis that greater regulatory clarity and enforcement coherence causally influence institutional confidence and the trajectory of DeFi adoption. It concludes with actionable policy recommendations—including targeted regulatory sandboxes, RegTech investment, on-chain accountability mechanisms, innovation-linked incentives, and mutual recognition agreements—to help the UAE balance innovation with consumer protection and financial stability.

Christopher K. Odinet, Andrea Tosato

No abstract is available for this record.