This paper examines the recurring dynamics of financial crises through a comparative case study of the Dotcom bubble, the 2008 global financial crisis, and the ongoing cryptocurrency era. The objective is to investigate whether cryptocurrencies represent a genuine financial revolution or a repetition of past speculative manias. Using a qualitative methodology, the study applies a behavioral finance framework to analyse biases such as herding, overconfidence, and FOMO, and combines this with the evaluation of market data, including IPO trends, interest rates, and volatility indices. The results reveal strong equivalents across all three cycles. In each case, investor sentiment amplified volatility, and speculative assets obscured true risk. Weak regulation left markets vulnerable to collapse. Today’s ICOs are a reflection of IPOs in the Dotcom bubble, meanwhile the regulatory faults in 2008 find similarities in decentralized finance (DeFi). Moreover, the evidence challenges the Efficient Market Hypothesis, which markets illustrate collective perceptions instead of objective fundamentals. The findings suggest that financial markets repeat inefficiencies in new forms. Cryptocurrencies risk becoming another phase in the history of financial instability without coordinated regulation, investor education, and macroprudential monitoring.
Blockchain, originally devised for Bitcoin, has evolved beyond cryptocurrencies to become a transformative technology in banking and finance. Its decentralized, secure, and transparent characteristics promise improved efficiency, reduced fraud, and cost savings. However, challenges such as scalability, regulatory uncertainty, and cybersecurity risks persist. This paper explores the benefits, risks, and future prospects of blockchain adoption in the financial sector. The study includes a review of existing literature, real-world applications, and an analysis of ongoing challenges and potential future developments.
The contemporary world has witnessed a technological revolution in the field of financial technology, which gave rise to cryptocurrencies as a decentralized electronic monetary system.However, this technological development has also entailed serious criminal uses, as criminal organizations have exploited the characteristics of these currencies to facilitate human trafficking crimes.This study addresses the conceptual framework of cryptocurrencies and human trafficking crimes by analyzing their definitions and distinctive features.It then provides a detailed review of the methods of using cryptocurrencies in various stages of human trafficking crimes, starting from financing recruitment and transportation operations, through collecting proceeds from the sexual exploitation and forced labor of victims, to money laundering and concealing criminal proceeds using advanced technologies.The study aims to uncover the technical and financial mechanisms exploited by criminal organizations in using cryptocurrencies to finance human trafficking crimes, analyze the legal and security challenges facing international counter-efforts, and offer practical recommendations to develop legal frameworks, enhance international cooperation, and introduce advanced regulatory technologies to confront this growing phenomenon.
This edition advances our scholarly mission to explore how frontier technologies—ranging from artificial intelligence, blockchain, tokenization, digital identity systems, and decentralized finance to advanced econometric modeling—are reshaping global financial ecosystems while addressing pressing social, economic, and environmental challenges. Building upon the intellectual foundation established in previous issues, this volume brings together empirically rigorous and conceptually innovative contributions that illuminate the dynamic interplay between digital transformation, ethical governance, institutional capacity, and sustainable development. The manuscripts featured in this issue employ a wide spectrum of analytical methods, including bibliometric mapping, qualitative case study design, and ARDL cointegration modeling, enriching our understanding of how next-generation financial technologies influence real-world socioeconomic outcomes.
The fast pace of development of cryptocurrency markets challenges classical financial theories, highlighting the importance of investor psychology and sentiment in shaping the dynamics of prices and volatility. In sharp contrast to traditional assets, the cryptoverse is also far more driven by behavioral factors with market action frequently a result of sentiment, cognitive bias and social media than fundamentals. This study examines the intersection of behavioral finance and cryptocurrency investments, and specifically how investor sentiment affects police uncertainty phenomenon, is examined on already established and emerging markets. Using a literature-based integrative review approach, we integrate empirical and theoretical research between 2017 and 2025 from peer-reviewed sources in Scopus, ScienceDirect, JSTOR, SSRN, and Google Scholar. The review also identifies behavioural patterns that are applied again and again, such as overconfidence, herding, anchoring, and loss aversion, and looks at how they manifest in the world of crypto. It is also assessing more sentiment proxies—such as Google Trends, Twitter activity, and Reddit threads—portraying their predictive link to price volatility and trading volume. The results confirm the inefficient property of the Cryptocurrency market and also justify the relevance of behavioral finance in decentralized sentiment-sensitive markets. The paper makes both theoretical contributions by enabling the application of sentiment analysis to blockchain based assets, and practical proposals to investors, regulators, and fintech developers. Highlighting the importance of hybrids, the study argues that behaviorally driven sentiment analysis, as well as artificial intelligence (AI) driven sentiment models should be integrated into market governance frameworks. The results confirm the inefficient property of the Cryptocurrency market and also justify the relevance of behavioral finance in decentralized sentiment-sensitive markets. The paper makes both theoretical contributions by enabling the application of sentiment analysis to blockchain based assets, and practical proposals to investors, regulators, and fintech developers. Highlighting the importance of hybrids, the study argues that behaviorally driven sentiment analysis, as well as artificial intelligence (AI) driven sentiment models should be integrated into market governance frameworks.
This paper aims to carry out a systematic study on the application of blockchain technology in the field of Accounts Receivable Financing (ARF). The report first peels apart the main pain points of the traditional ARF model (factoring) from the aspect of information asymmetry, transmission of credit and confirmation of rights. Then the report does a thorough analysis on how blockchain technology (especially the characteristics of unchangeable nature, smart contracts, and asset digitization) theoretically solves these pain points, emphasizing the elaboration on the realization path of "penetration of credit". The core of this report is the in-depth study and comparison of four important cases of significance, namely, the "Dual-Chain Connect" of Ant Group, "Yi Enterprise Chain" (YQLink) of Ping An OneConnect, WeBank (based on FISCO BCOS), and "Jing Bao Bei" of JD Technology. Through the comparison of these cases in terms of their business models, technical architecture and risk control mechanism, this report summarizes three mainstream realization mode: "central enterprise-led", "fintech platform-led", and "(digital) bank-led", and reveals their basic difference regarding "source of credit". Finally, the study talks about the common problems confronting the field, such as data silo, interoperability and regulatory uncertainty, and gives its optimistic outlook regarding its future trends of integration into Artificial Intelligence (AI), Internet of Things (IoT), and evolution towards Decentralized Finance (DeFi).
The rapid expansion of blockchain-based governance has introduced new models for managing philanthropic resources, including the use of Decentralized Autonomous Organizations (DAOs) to distribute infaq and sadaqah. The decentralization of decision-making and the automation of financial flows offer potential solutions to long-standing challenges such as transparency deficits, centralization of authority, and inefficiencies in conventional charity systems. The research is motivated by the growing need to evaluate whether DAOs can enhance accountability, inclusivity, and equitable resource distribution within Islamic social finance. The study aims to assess the effectiveness of DAO-driven mechanisms in managing infaq and sadaqah, particularly their capacity to ensure fair participation, minimize human bias, and strengthen social justice outcomes. The objectives include analyzing governance structures, technological capabilities, and ethical implications of DAO integration. A mixed-methods design was adopted, combining blockchain system analysis, interviews with Islamic finance experts, and simulation of DAO-based distribution models. The study also employed comparative evaluation between traditional centralized charity workflows and smart contract–enabled automation. The results indicate that DAO-based models significantly improve transparency, reduce administrative delays, and enhance participatory decision-making among community members. Smart contracts ensure tamper-proof recordkeeping, while tokenized voting systems strengthen collective oversight and reduce elite capture. The research concludes that DAOs offer a promising pathway for decentralized social justice by aligning technological decentralization with Islamic ethical principles of fairness, trust, and communal responsibility. Strengthening digital literacy, enhancing regulatory clarity, and developing Shariah-compliant smart contract standards are essential for sustainable implementation.
Decentralization is widely promoted as a governance reform to improve efficiency, accountability, and responsiveness in public service delivery, particularly in the health sector. In Pakistan, the 18th Constitutional Amendment of 2010 marked a significant shift in governance by devolving health sector responsibilities from the federal government to provincial governments. This reform substantially transformed Public Financial Management (PFM) arrangements in the health sector, affecting budgeting, expenditure control, and accountability mechanisms. This paper examines the impact of decentralization on health sector PFM in Pakistan by situating the reform within broader theoretical and empirical literature. It analyzes changes in health financing, governance, and service delivery outcomes while identifying persistent institutional and fiscal challenges. The study argues that although decentralization has enhanced provincial autonomy and policy responsiveness, weaknesses in public financial management capacity, coordination, and equity continue to limit its effectiveness. Strengthening PFM systems is therefore essential for translating decentralized governance into improved health outcomes in Pakistan.
Introduction Over the past two decades, Sub-Saharan Africa has achieved remarkable progress toward the UNAIDS 95-95-95 targets through sustained donor investment, community leadership, and political commitment. However, in early 2025, abrupt funding contractions including the suspension of PEPFAR disbursements by the United States and significant cuts by other major donors, threaten to reverse gains in HIV diagnosis, treatment initiation, and viral suppression. This study examines the potential impact of these funding shifts on the HIV response and explores strategies to sustain progress in a changing financing landscape. Methodology This review employed a structured narrative synthesis approach. A comprehensive search was conducted across peer-reviewed journals, grey literature, and institutional reports published between 2020 and 2025. Databases searched were PubMed, Google Scholar, and institutional repositories of UNAIDS, PEPFAR, USAID, and the Global Fund, using terms such as “HIV/AIDS,” “Sub-Saharan Africa,” “95-95-95 targets,” “donor funding cuts,” and “health system resilience.” Of 99 records identified, 15 articles and reports met inclusion criteria. Data were thematically analyzed along the three pillars of the 95-95-95 framework, emphasizing health system resilience, equity, and sustainability. Findings Funding cuts have led to immediate service delivery challenges. HIV testing programs in East and Southern Africa report supply chain interruptions, staff shortages, and reduced outreach, particularly in marginalized communities. ART initiation has slowed due to clinic budget constraints and inadequate safety nets, leading to declines in patient retention and treatment uptake. Viral load monitoring systems are increasingly strained, with insufficient resources for reagents, equipment, and logistics. These disruptions are projected to cause a sixfold increase in new infections and a surge in AIDS-related mortality by 2029 if unaddressed. Furthermore, funding disparities are exacerbating inequities, with countries like Botswana and Eswatini maintaining progress due to better ability to absorb shocks, while conflict-affected and resource-poor regions face greater setbacks. Discussion The donor funding shortfall presents both a crisis and an opportunity. Immediate mitigation requires tapping emergency funds, reprogramming health budgets, and negotiating bridge financing with bilateral and multilateral partners. Long-term sustainability hinges on strengthening domestic resource mobilization through health levies, sin taxes, and diaspora bonds, integrating HIV services into primary healthcare, and scaling digital and community-led service delivery platforms for decentralized adherence support. Geospatial targeting and real-time data systems can optimize resource allocation to emerging hotspots. By fostering regional solidarity and community-driven financing, Sub-Saharan Africa can convert this funding crisis into an opportunity for resilient, locally owned HIV responses that keep the path to ending AIDS within reach.
Darlington Chizema, Ramos E. Mabugu, Christelle Meniago
This study examines the effect of renewable energy consumption on energy poverty across 43 Sub-Saharan African countries from 2002 to 2021. Using a dynamic panel data approach and a two-step System GMM estimator, it addresses endogeneity concerns in energy poverty analysis. Results show energy poverty is persistent, reflecting deep institutional and infrastructural challenges. While renewable energy consumption is positively associated with energy poverty, the modest impact suggests current investments are concentrated in urban or grid-connected areas, with limited benefits for rural populations. This highlights the need for inclusive, decentralized energy strategies. Human capital emerges as a key factor in alleviating energy poverty, emphasizing the importance of integrating energy access with education and health initiatives. Conversely, GDP per capita, institutional quality, and population density show no significant effects, challenging assumptions that economic growth alone can resolve energy deprivation. The lack of a declining trend in energy poverty underscores the urgency for targeted, long-term interventions. The study advocates pro-poor energy policies, innovative financing, and multi-sectoral approaches linking energy access to broader development goals to advance Sustainable Development Goal 7 (SDG 7). Future research should explore subnational disparities and the varied impacts of renewable technologies to inform context-specific solutions.
Developments and changes in technology play a significant role in addressing climate change, one of which is decentralized finance, which is currently expanding, and it is still unclear whether it has a dynamic relationship with climate change. This study employs the TVP-VAR Connectedness model with the aim of analyzing the dynamic relationship between the decentralized finance operations and CO2 emissions, the impact of shocks from DeFi operations (Total Value Locked, Volume, Returns, Fees, and Revenues) dynamically increasing CO2 emissions, as well as to assess the role of DeFi returns in strengthening the transmissions of DeFi activity to CO2 emissions. The results show that DeFi operations have a dynamic relationship with CO2 emissions at a moderate level through shocks transmitted by DeFi operational indicators. It was also found that TVL acts more as a net receiver than a net transmitter, unlike Volume, Fees and Revenues. Returns do not significantly transmit shocks to CO2 emissions and are more exogenous in nature, while both TVL and Returns are predominantly influenced by internal idiosyncratic shocks. These findings emphasize the importance of integrating Green FinTech policies to ensure sustainable DeFi growth. The findings also provide important implications for regulators, industry practitioners and academics in their efforts to balance the advancement of DeFi with environmental sustainability.
Ridwan Yusuf, Andreas Perdana, Febri Sugandi, Untoro Apsiswanto
Pada periode 2024-2025, pertemuan antara Large Language Model dan teknologi blockchain melahirkan kelas perangkat lunak baru yang disebut AI Agent on-chain, perangkat lunak otonom yang menerjemahkan tujuan pengguna menjadi rangkaian transaksi Decentralized Finance dan menandatanganinya tanpa intervensi manusia. Adopsi yang berlangsung cepat memperlihatkan tiga celah konseptual yang belum terjawab: kompleksitas alur eksekusi multi-langkah pada DeFi, lansekap kerentanan yang khas LLM seperti indirect prompt injection dan jailbreak yang berimplikasi langsung pada aset finansial, dan ketiadaan kerangka tata kelola yang akuntabel pada ekosistem yang terdesentralisasi. Kajian ini menyintesis 34 publikasi terverifikasi dari basis data Zotero ke dalam empat tema yang saling terkait: arsitektur agen dan kolaborasi multi-agen, manajemen kunci pada agentic wallet, lansekap ancaman keamanan, serta peran blockchain sebagai trust layer. Temuan kunci yang muncul adalah bahwa pertahanan yang hanya bertumpu pada lapisan bahasa terbukti tidak memadai; kontrol pada lapisan tindakan, melalui kebijakan yang dinamis, isolasi enclave, atau secret sharing multi-pihak, menjadi prasyarat ketika konsekuensi finansial bersifat permanen. Kontribusi yang diajukan mencakup taksonomi vektor ancaman per lapis arsitektur, kerangka pertahanan tiga-lapis hibrid, serta agenda riset masa depan dengan lima arah konkret.
Classical political economy treats private property as foundational to economic coordination and individual autonomy. This paper argues that while private property remains formally intact, it has been substantively hollowed out by the erosion of privacy in the information age. The central claim is that private information—defined as the owner's privileged epistemic access to knowledge relevant to her assets—is a necessary condition for meaningful private property. When such information is no longer privately controlled, ownership persists only as legal fiction rather than effective sovereignty. Through analysis of software licensing, smart property, and decentralized finance, the paper shows how contemporary property increasingly functions as conditional, reversible, access-based arrangements dependent on informational infrastructures governed by others. Revisiting Hayek's epistemological defense of property, the analysis demonstrates that the loss of informational privacy undermines the assumptions that allowed private property to sustain an extended order. The paper engages with objections from information economics and cryptographic privacy, examines systemic risks to economic stability, innovation, and political order, and concludes that the defining challenge of our time is not the abolition of private property, but the disappearance of the private itself.
Mila Dwi Rahmatya, Mohd Syahiran Abdul Latif, Mohd Hapiz Mahaiyadin, Mohd Sirajuddin Siswadi Putera Mohamed Shith
Decentralized Exchanges (DEX) powered by immutable and automated smart contracts have revolutionized cryptocurrency trading by eliminating intermediaries. However, the alignment of their mechanisms with Islamic principles of sale and purchase remains unclear. This study conducted a qualitative analysis to assess the sharia compliance of DEXs. This research examines the conformity of DEX trading mechanisms with sharia principles by utilizing content and normative analysis of classical and contemporary Islamic finance literature alongside DEX-related articles, white papers, and industry reports. The findings reveal critical areas of non-compliance, particularly concerning contracting parties ('aqīd) and subject matter (mabī'). DEXs lack mechanisms to verify the legal capacity of transacting parties, potentially enabling involvement from individuals deemed incompetent under sharia. Cryptocurrencies as a medium of exchange also raise concerns because of their ambiguous nature as commodities or currencies, potentially leading to gharar (uncertainty) and ḍarar (harm). While certain aspects, such as the clarity of offer and acceptance (ijāb wa qabūl) through smart contracts and specific traded assets, such as certain tokens and NFTs, might align with sharia, the overall risks associated with speculation and inherent uncertainties necessitate caution. This study recommends that Muslims approach DEXs with caution until clear guidelines and sharia-compliant platforms are established. Furthermore, increased scrutiny from Islamic scholars and regulatory bodies is crucial for ensuring this rapidly evolving technology's ethical and compliant development. Abstrak Decentralized Exchanges (DEX) yang didukung oleh smart contracts telah mengubah perdagangan mata uang kripto dengan menghilangkan peran perantara. Namun, kesesuaian mekanisme DEX dengan prinsip jual beli dalam Islam masih menjadi perdebatan. Studi ini melakukan analisis kualitatif untuk menilai kepatuhan DEX terhadap syariah. Metode analisis konten dan normatif digunakan berdasarkan literatur keuangan Islam klasik dan kontemporer, serta artikel, white papers, dan laporan industri terkait DEX. Hasil penelitian menunjukkan beberapa aspek kritis yang tidak sesuai dengan syariah, terutama terkait pihak yang berkontrak ('aqīd) dan objek akad (mabī'). DEX tidak memiliki mekanisme untuk memverifikasi kapasitas hukum pihak yang bertransaksi, sehingga berpotensi melibatkan individu yang tidak kompeten menurut syariah. Selain itu, status mata uang kripto sebagai alat tukar menimbulkan ketidakpastian terkait posisinya sebagai komoditas atau mata uang, yang dapat mengakibatkan gharar (ketidakpastian) dan ḍarar (kerugian). Meski beberapa aspek seperti penawaran dan penerimaan (ijāb wa qabūl) melalui smart contracts sesuai syariah, risiko spekulasi tetap tinggi. Oleh karena itu, studi ini merekomendasikan kehati-hatian bagi umat Muslim dalam menggunakan DEX hingga panduan syariah yang lebih jelas tersedia, serta pengawasan ulama dan regulator yang lebih ketat diperlukan.
Technologia rozproszonych rejestrów (DLT), która stanowi fundament Internetu Wartości (IoV), przekształca współczesne rynki pożyczkowe. Protokoły pożyczkowe, będące kluczowym komponentem zdecentralizowanych finansów (DeFi), oferują bardziej elastyczne narzędzia alokacji kapitału niż tradycyjne struktury finansowe. Protokoły DeFi, takie jak Compound, Maker i Aave, odpowiadają na wyzwania napotykane przez klasyczne rynki pożyczkowe, w szczególności banki i scentralizowane platformy pożyczkowe. Przedstawimy także szczegółowy opis mechanizmów działania tych protokołów, z uwzględnieniem ich innowacyjnych podejść do zarządzania ryzykiem oraz zabezpieczeniami. Pomimo swojej innowacyjności protokoły DeFi wciąż wykazują zależność od tradycyjnych systemów finansowych, co wskazuje na złożone relacje między tymi dwoma sektorami. Distributed Ledger Technology (DLT), which forms the foundation of the Internet of Value (IoV), is transforming modern lending markets. Lending protocols, a key component of decentralized finance (DeFi), offer more flexible capital allocation tools compared to traditional financial structures. DeFi protocols, such as Compound, Maker, and Aave, address challenges faced by conventional lending markets, particularly banks and centralized lending platforms. This paper also provides a detailed description of how these protocols operate, highlighting their innovative approaches to risk management and collateralization. Despite their innovation, DeFi protocols still exhibit dependence on traditional financial systems, illustrating the complex relationships between these two sectors.
This paper examines the tensions between existing infrastructure and the need for transitional change in Dutch municipal wastewater collection and treatment. In the Netherlands, sanitation is primarily managed by public actors, with local government playing a major role. The paper demonstrates how local governments navigate these tensions and are both restricted and enabled by the current infrastructure and governance arrangements. Based on interviews, literature reviews, and analyses of statistical trends, it describes five attempts at reform in Dutch sanitation from 1980 to 2020: phosphorus removal; separating stormwater from combined sewers; water cycle companies; energy factories; and decentralized sanitation. The multi-level governance system, with decentralized infrastructure and financing, allows local governments to experiment with alternative practices, develop knowledge, and employ various interactions to mainstream innovations. However, the division of tasks in Dutch sanitation governance tends to optimize sub-systems rather than the entire system. For nationwide implementation, legislation and strong central coordination are essential. Additionally, New Public Management reinforces existing infrastructure lock-in. The paper enhances our understanding of the local government’s role in transitional change and offers insights into how the challenges of existing infrastructure can be mitigated in pursuit of sustainable wastewater solutions.
Tobias Kranz, Vincent Schaaf, Tobias Guggenberger, Jens Strüker
Decentralized Finance (DeFi) promises to lay ground for a more open financial system enabled by blockchain technology. Therein, stablecoins have recently gained momentum as regulated and trusted payment instruments, increasingly adopted for cross-border transactions and supported by initiatives such as the GENIUS Act in the U.S. and the European MiCAR framework. While stablecoins create the foundation of trust for linking DeFi with traditional finance, the ecosystem still depends heavily on cryptocurrency markets due to limited real-world asset integration. Existing research largely focuses on traditional securities and tradable assets, but scant attention has been paid to one of the world’s largest asset classes, real estate. To address this gap, we propose a framework for the tokenization of real estate for integration into the DeFi ecosystem. Using the Design Science Research (DSR) approach, we construct and evaluate our framework through expert interviews and smart contract simulations. The simulations validate technical feasibility and demonstrate efficiency gains, with batch transfers reducing transaction costs for portfolio purchases. Building on these evaluations, we derive design principles for the nascent field of real-world asset tokenization. These principles highlight the importance of covering the entire product range, pursuing end-to-end compliance, leveraging token standards for interoperability, and extending their functionality for efficiency and scalability. By combining regulatory, organizational, and technical perspectives, our work advances design knowledge for compliant integration of real-world assets into DeFi.
Although Large Language Models (LLM) have shown impressive performance across various domains, there is a shortage of benchmarks for systematically evaluating their in-depth understanding of specialized fields such as blockchain. This study extends the Self-Instruct methodology to introduce BLADE (Blockchain Large Language model Assessment Dataset for Evaluation), a comprehensive benchmark dataset for assessing LLM comprehension in the blockchain domain. BLADE consists of a total of 1,382 questions organized according to a systematic classification of blockchain knowledge, featuring a detailed structure with 15 main categories and 5 sub-categories for each. The benchmark covers the entire spectrum of blockchain knowledge, from its fundamentals to consensus mechanisms, architecture, smart contracts, token economy, Decentralized Finance (DeFi), NFT(Non-Fungible Token)s and digital assets, security, governance, and real-world application cases. In this research, we present a benchmark generation methodology utilizing the domain knowledge of GPT-4.5, which allowed us to create high-quality evaluation items of varying difficulty and types from expert-verified seed questions. The evaluation results of various open-source LLMs, including Qwen, DeepSeek, and Kanana, on BLADE showed that current models exhibit significant differences in their understanding of blockchain, with Qwen2.5-7B-Instruct-1M achieving the highest performance. The BLADE benchmark provides a tool for precisely evaluating and improving the blockchain comprehension of LLMs, thereby promoting the effective fusion of AI and blockchain technology and contributing to the development of more reliable decentralized systems.
Decentralized Finance (DeFi) enables financial services to operate without centralized intermediaries, using smart contracts and blockchain consensus to ensure transparency and trust minimization. While DeFi protocols like Aave and MakerDAO use overcollateralization to mitigate credit risk, this approach creates capital inefficiencies and limits access to borrowers lacking on-chain assets. This paper introduces Inverum, a novel DeFi lending protocol designed to support undercollateralized loans for Web3 businesses and Decentralized Autonomous Organizations (DAOs). Inverum integrates on-chain credit scoring via soulbound tokens, decentralized liquidity pools, and governance-driven incentives to enable trustless, reputation-based lending. The protocol offers a fully composable framework for exploring undercollateralized lending without relying on traditional identity or off-chain reputation systems, contributing a research-ready model for future experimentation and protocol design.
Cryptocurrency was designed to eliminate the constraints of traditional finance: central bank control, governmentregulation, inflation, and capital controls. This paper argues that these 'constraints' were saturation mechanisms thatprovided stability. By systematically eliminating them, cryptocurrency has created a saturation-free monetarysystem (β X 0) that is structurally incapable of price stability.Using the Landau-Stuart framework, we analyze how each design feature of cryptocurrency̶fixed supply,decentralization, censorship resistance, 24/7 trading, HODL culture̶removes a stabilizing mechanism present intraditional finance. The result is extreme volatility: not a bug but an inevitable consequence of the designphilosophy. We extend the analysis to stablecoins (borrowed β), DeFi (negative β), and Proof-of-Work energyconsumption (saturation-free resource extraction). We conclude that cryptocurrency faces a fundamental dilemma:adding saturation mechanisms would provide stability but contradict the libertarian design philosophy that givescryptocurrency its appeal. Cryptocurrency cannot be both free and stable.
The study focuses on examining the implications of cryptocurrencies to the Bank Secrecy/Anti-Money Laundering (BSA/AML framework.Accordingly, it applies a comparative legal research approach to understand trade-offs between cryptocurrencies and BSA/AML through comparing information from different primary sources obtained from LexisNexis, Bloomberg Law, and Westlaw.The motivation behind the study was the rapid adoption of cryptocurrencies among investors and retail consumers, which poses risks to the stability of the financial system.The study noted lack of a devoted prime regulator with paramount powers to oversee all cryptocurrency activities as a gap that blockchain applies, in respect to the regulatory arbitrage theory, to circumvent harsh regulations in some jurisdictions, for favorable ones in other jurisdictions.Some of the features noted to challenge effective regulation of these currencies include anonymity, lack of physical equivalent to bank notes and coins, decentralized, and the agile technology used in blockchain.However, efforts to embrace effective adoption and incorporation of crypto assets into the financial system are being demonstrated through the enactment of House Bills, legislative histories, State and Federal Acts such as the CANSEE) Act (S.2355) to mitigate against the risks of illicit activities perpetrated in the decentralized finance (DeFi).The study established if the current efforts being made might be combined with amendment of the BSA/AML regulation to apply in decentralized finance, identification of a primary regulator for cryptocurrencies, and collaboration between regulators and blockchain developers, they would enhance secure and effective adoption of cryptocurrencies.
This study examines the intersection of cryptocurrency, terrorism financing, and sustainable economic practice, highlighting impacts on financial accountability and global security.While cryptocurrencies offer financial inclusion and innovation, their pseudonymous and decentralized nature also facilitates illicit activities like terrorism financing.Using Financial Liberalization and Illicit Financial Flows theories, the research employs qualitative thematic analysis with 12 experts from regulatory, technical, law enforcement, and academic backgrounds.Findings reveal cryptocurrencies' dual potential for abuse and benefits such as low transaction fees.The study calls for effective global regulatory frameworks, enhanced public-private collaboration, and advanced tools like AI and blockchain analysis to manage risks.It advocates a balanced regulatory approach that promotes transparency and harnesses cryptocurrencies' benefits while ensuring security, recommending harmonized regulations, cooperative task forces, regulatory sandboxes, and mandatory compliance audits.
Luca Pennella, Pietro Saggese, Fabio Pinelli, Letterio Galletta
Decentralized Finance (DeFi) applications introduce novel financial instruments replicating and extending traditional ones through blockchain-based smart contracts. Among these applications, DeFi derivatives protocols enable the creation and trading of decentralized derivative instruments whose value depends on underlying cryptoassets, indices, or other reference variables. Despite their growing significance, however, they remain relatively understudied compared to other DeFi protocols, such as lending protocols and decentralized exchanges. This paper systematically analyzes DeFi derivatives protocols, categorized into perpetuals, options, and synthetics, with the aim of comparing their instrument structures, protocol mechanisms, operational dynamics, and economic agents. We provide a formal characterization of the main classes of decentralized derivative instruments and develop a protocol-agnostic framework that connects instrument-level specifications, market-state variables, and protocol-level mechanisms. We complement the analytical framework with numerical simulations that evaluate how derivative positions evolve under varying economic conditions, including changes in underlying asset prices, volatility, protocol-specific fees, and leverage. Overall, this study provides a structured analytical framework for understanding and comparing the design and functioning of decentralized finance derivatives protocols.