In an era defined by rapid technological advancement, the realm of finance has undergone a profound transformation.The emergence of digital finance, characterized by the integration of cutting-edge technologies and financial services, has revolutionized how individuals and businesses interact with money.This publication delves into the multifaceted landscape of digital finance, exploring its key components, implications, and the potential it holds for driving economic growth and financial inclusion.The foundation of digital finance lies in block chain technology, a decentralized ledger system that ensures security and transparency in financial transactions.Alongside block chain, crypto currencies have emerged as a dynamic force in the global economy, offering new avenues for financial transactions and investment opportunities beyond traditional fiat currencies.This paper provides an in-depth analysis of crypto currencies, delving into their diverse applications and the impact they have on traditional financial systems.Moreover, digital finance encompasses a spectrum of payment systems, from mobile wallets to contactless transactions, revolutionizing the way individuals conduct daily financial activities.The democratization of lending and investment through peer-to-peer platforms and crowd funding further challenges conventional financial models, providing new avenues for capital formation and investment.Fintech, as a disruptive force within the financial sector, represents a key aspect of this digital revolution.The fintech ecosystem characterized by startups and established players alike, leverages cutting-edge technologies such as artificial intelligence and machine learning to redefine traditional financial services.This paper examines the role of AI and machine learning in enhancing decision-making processes, risk assessment, and customer experiences in financial services.However, this transformation is not without its challenges.Navigating the evolving regulatory landscape and ensuring compliance remains a critical concern for participants in the digital finance ecosystem.Additionally, as digital finance proliferates, addressing security and privacy concerns surrounding financial data becomes paramount.Crucially, digital finance has the potential to bridge the access gap, extending financial services to underserved and unbanked populations worldwide.Through case studies and successful initiatives, this publication highlights the transformative power of digital finance in driving financial inclusion and reducing economic disparities.As we look to the future, emerging technologies such as decentralized finance (DeFi), central bank digital currencies (CBDCs), and quantum computing hold the promise of further reshaping the financial landscape.However, they also bring with them new challenges, particularly in the realms of security and privacy.In conclusion, the journey from bits to bucks signifies a paradigm shift in the world of finance.By embracing digital finance, individuals, businesses, and governments can unlock unprecedented opportunities for efficiency, inclusivity, and economic growth.This publication serves as a roadmap for understanding, navigating, and harnessing the power of digital finance in the 21st century.
In this paper we try to reflect on how one of the financial phenomena of the last twenty years, namely cryptocurrencies, has been analysed by the scientific community of the Knowledge Management (KM) field. The issue is relevant because the raise of cryptocurrencies as an economic asset has been occurring in a time in which KM gained social prominence. And also because the evolution of cryptocurrencies should be also related to knowledge about their own value. Within this context, we present a literature review on papers that exist in the SCOPUS database about cryptocurrencies and KM. After analysing those papers, the general idea is that KM is very far away from the cryptocurrency phenomenon; the reason may be that it is very difficult to use the more common models available on KM to analyse cryptocurrencies; also the economic and social agents that might be interested in KM are not those who invest in cryptocurrencies; finally, the data available on cryptocurrencies are mostly speculative, and it is very difficult to make any scientific study on them. These conclusions may be of interest for the KM community at large, because they indicate a new subfield of research, and for practitioners, because they mean that there is not much science in the evolution of cryptocurrencies themselves. Finally, for policymakers, the findings mean the expanding the possibility of use of cryptocurrencies in societies may be extremely risky given their volatility and the lack of precise scientific knowledge about them. The paper is original because it relates to concepts that have only very seldom and scarcely put together.
The research paper investigates the profound impact that cryptocurrencies have exerted on traditional financial systems since the emergence of Bitcoin in 2009. The rapid growth of cryptocurrency market and its increasing integration in global economics have raised significant questions about the future coexistence and potential transformation of traditional financial structures. The study employs a multidisciplinary approach, combining economic analysis, regulatory examination and technological insights to explore the multifaceted implications of cryptocurrencies.
This study investigates diversification potential in the Malaysian and United States (US) Islamic stock indices, Bitcoin, gold, and crude oil prices, particularly amidst economic crises. It uses wavelet coherence and MGARCH-DCC on a dataset spanning 2014 to 2022. The findings revealed that there are diversification potentials for investors. The dynamic conditional correlation (DCC) analysis indicated that the correlation of gold with both indices is generally low, except for a brief period of heightened correlation during the COVID-19 pandemic in 2020. The correlations between bitcoin and Islamic Stock Index Returns (ISIR) of the US and Malaysia respectively are generally weak across the study period except during the pandemic for the US. Hence, it is prudent for investors with exposure to the countries' stock index to incorporate gold within their portfolio to harness diversification benefits. The results further suggested that Bitcoin is also an appealing option for portfolio diversification. Our findings further revealed that during the Russia-Ukraine conflict, crude oil had demonstrated a minimal correlation with both the US and Malaysia ISIR, providing an opportunity for diversification. The results further suggested that Islamic equities can be a buffer against risk and instability, especially during turmoil, offering crucial implications for Shari'ah-compliant investors in Malaysia and the US. The study points to the need for further investigations incorporating additional economic shocks to understand diversification opportunities across varying investment horizons and holding durations.
Hanna Yarovenko, Agnieszka Łopatka, Tetyana Vasilyeva, Imre Vida
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Blockchain can enable small countries to overcome systemic constraints and strengthen their economies. Based on dynamic capabilities theory, we develop a conceptual framework that explores the applicability of blockchain for fostering economic development. Specifically, we postulate that the agent’s role in dynamic capabilities theory can be extended from the organisation level to the country level. Our proposed framework integrates blockchain as an economic driver and dynamic capabilities on higher-order and lower-order levels (i.e., business and investment development, human capital development, financial system enhancement, regulatory framework improvement, and systems and infrastructure improvement) to show their impacts on different aspects of economic development. International regulatory and political factors serve as moderators that determine whether a national blockchain-based strategy will ultimately be successful. In summary, we illustrate how blockchain as an enabler of dynamic capabilities can contribute to a small country’s economic development.
Felix Aberu, Jimoh Sina Ogede, Joseph Oluwaseun Ewarawon
The movement of exchange rates generally had demonstrated unpredictable patterns over time as a traditional mode of payment, particularly the black or parallel exchange market that is already fueled by demand pressure. However, cryptocurrency and the parallel or black exchange market are global phenomenon traded outside the government strict regulations in Nigeria, hence, their economic implications and understanding by many persons, banks, policy-makers, governments, and companies remain a priori unclear. Therefore, this study investigates the impacts of cryptocurrency on black or parallel exchange rate market movement in Nigeria from Jan, 2021 to April, 2023 using the autoregressive distributive lag (ARDL) regression analysis and Granger causality test to affirm the hypothesis that, cryptocurrency do not have significant impacts on black market exchange rate movement in Nigeria. The result of the ARDL shows that cryptocurrencies trading are core determinants of the black or parallel market exchange rate movement in Nigeria during the study period. Therefore, we concluded that cryptocurrency has a negative and significant impact on black market exchange rate movement in Nigeria from Jan. 2021 to April, 2023 and recommend that the government as a matter of urgency regulate cryptocurrency in order to curb the excesses that come with it just like in Japan, China, and Australia, since Nigeria still engages foreign currency controls as monetary policy tools, so as to improve on consumers’ confidence on the domestic currency.
Despite the growing interest in Blockchain Innovation (BI), there is a lack of research on its predictors. This study draws on the policy uncertainty literature to hypothesize the positive influence of economic policy uncertainty (EPU) and cryptocurrency policy uncertainty (UCRY Policy) on country-level BI, determined by the total number of blockchain patents in a country. We tested our hypotheses using a two-level sample of 126 quarterly observations nested in five countries: Australia, China, Japan, Korea, and the United States. The results confirm our expectation that the EPU and UCRY Policy lead to an enhanced BI. Moreover, we found that the UCRY Policy is more impactful on BI than EPU, and that when examining the two policy uncertainty indicators simultaneously, the effect of EPU on BI becomes insignificant. This study has important implications for policymakers and investors.
Researcher and Assistant Professor Dr. & Scarborough Street, Southport, Gold Coast, Queensland, 4215, Australia, Bundit Anuyahong, Nipol Ek-udom
<strong>ABSTRACT: </strong>This study aimed to investigate the impact of cryptocurrency on global trade and commerce. The research objectives included examining the extent to which the adoption of cryptocurrency has disrupted traditional financial systems and affected cross-border transactions, as well as investigating the potential benefits and challenges of using cryptocurrency for global trade and commerce. A mixed-methods research design was used, incorporating both quantitative and qualitative data collection and analysis techniques. The study involved an extensive literature review, a survey of businesses involved in international trade, and interviews with key stakeholders. The results showed that cryptocurrency offers benefits such as reduced transaction costs, faster settlement times, and increased transparency in transactions. However, there are also challenges such as regulatory and legal hurdles, security concerns, and limited understanding of cryptocurrency. The study also highlights the factors that influence the adoption of cryptocurrency in international trade, including regulatory and legal frameworks, security concerns, awareness and understanding of cryptocurrency, transaction costs, and integration with existing systems. Finally, the attitudes and perceptions of businesses towards cryptocurrency are discussed, with the study showing that confidence in the reliability and security of cryptocurrency is a significant factor for adoption. Overall, the study provides insights into the potential opportunities and challenges presented by cryptocurrency in global trade and commerce, and the implications for policymakers, businesses, and investors.
James K. Olorundare, Rachel J. Fagboyo, Ojei H. Onyijen, Morenikeji Oni · 5 authors
The emergence of blockchain technologies has experienced rapid growth and generated lots of activities around the globe, where people use cryptocurrencies for transactions and as investments.Nigeria's cryptocurrency market is surging due to the devaluation of the naira and has caused local currency to depreciate.Cryptocurrencies and blockchain technologies are part of a broader wave of technologies that facilitate peer-to-peer (P2P) commerce, and personalisation of market products.The technology create money without central banks and facilitate payments without financial institutions.This study investigates the economic prospect of cryptocurrency with a focus on Nigeria as a case study.The study employed the use of qualitative data gathered using a structured online questionnaire.The result revealed that 69% of the participants were male, and 48.6% were between the ages of 25-34.Furthermore, 46.8% of the respondent are in support of cryptocurrency regulation by the Nigerian government, rather than the total ban placed on the technology.A large proportion (73%) of the respondents are not in support of Nigerian government prohibiting commercial banks from dealing with cryptocurrency.In addition, the majority (91%) of the participants had knowledge of cryptocurrency.The study concluded that the apex banks should deliberately adopt cryptocurrency and create a department that rolls out policies to control its value.
Purpose This paper investigates the global and local interest in Internet information about cryptocurrency and the Nigeria central bank digital currency, which is also known as eNaira. Design/methodology/approach Granger causality test and GMM coefficient matrix methodologies were used. Findings There is sustained increase in global and local interest in Internet information about eNaira in the first six weeks after eNaira adoption. Local interest in Internet information about cryptocurrency in Nigeria exceeded global interest in Internet information about cryptocurrency. The south-east region had the highest interest in cryptocurrency information followed by the south-south, the north-central, the north-east, the north-west and the south-west regions. In contrast, the north-east region had the highest interest in Internet information about eNaira, followed by the north-west, the north–central, the south-west, the south-south and the south-east regions. Nigeria recorded the highest global interest in Internet information about cryptocurrency and eNaira, while Japan and Brazil recorded the lowest interest during the period. The correlation results show a significant and positive correlation between interest in cryptocurrency information and interest in eNaira information. The Granger causality results show that global interest in cryptocurrency information causes both global and local interest in eNaira information. Also, local interest in cryptocurrency information causes global interest in eNaira information. The GMM regression coefficient matrix shows a significant positive relationship between interest in cryptocurrency information and eNaira information. Originality/value There are few studies on CBDC in country-specific contexts. This study adds to the literature by examining the Nigerian context.
Integrating Africa's small farmers to the agricultural supply chains is necessary for their economic growth and development. Nonetheless, the lack of access to finance prevents many African farmers from taking part in the supply chain. the agriculture sector has a persistent problem with getting financial from finance institutions. Smallholder farmers have been mostly excluded from the access to financing services. Blockchain has been applied to resolve a variety of issues in numerous sectors. In the agricultural industry, Blockchain is utilized to increase the supply chain's transparency, security, and traceability. the deployment of Blockchain technology, known as distributed and immutable ledger could be utilized to strengthen agriculture finance. Regarding this, we suggest a systematic literature review to gather all pertinent research on the applications of Blockchain technology for financial inclusion of African small farmers in order to identify current research themes. This research makes a concrete contribution by discussing how blockchain technology might help address the problem of financial exclusion of African small farmers, laying the groundwork for a potential solution that could link these farmers to the global agricultural supply chain.
Adrian Moroșan, Oana Oprişan, Eduard Alexandru Stoıca, Cosmin Tileagă
Through our study, we studied the perception of the students of an economic faculty speciality which are at the end of their studies and who will soon become economists, and their attitude towards the cryptocurrencies. Their contacts inside or outside the university led to their professional development because they brought to their attention the widening of the sphere of finance through the prism of a new concept that appeared fifteen years ago, that of cryptocurrency. The main scope of the paper is to understand how students currently relate to cryptocurrencies, after going through all the subjects in the curriculum of their economic specialization. The methodology will involve the use of a structured interview. Important results of our study will be related to the fact that the female students interviewed, who, unlike almost all of the female students, are or say that they will be involved in trading cryptocurrencies in the near future and to the fact that an important part of their information regarding the cryptocurrencies is obtained from outside the faculty. We will recommend, knowing the current situation of the interviewed students, to the teachers who teach various disciplines in the specialization of which the interviewed students are part of that they could try, in the situation where the taught subjects allow it, to offer to the students who will come in the following years additional information about the cryptocurrencies.
Digital financial services have flourished from simple peer-to-peer money transfers to advanced financial technologies that make use of the latest technologies in digital banking, distributed ledgers, and central bank digital currencies. Governments, corporations, and individuals may all benefit from new digital financial services. Expanding inclusive economic growth and addressing the Sustainable Development Goals can be accomplished through the development of inclusive digital financial services in an environment with the right regulatory framework and policies. The number of financial technology (Fintech) companies globally has grown, attracting billions of dollars new investments in recent years. However, Fintech companies remain relatively small compared with traditional financial service providers in developed countries. In contrast, Fintech services and products are becoming economically important in some developing countries. The article summarizes the experience of implementing Fintech in some high-ranked Fintech countries such as the United States, United Kingdom, Singapore, Australia, China and Indonesia; thereby providing policy implications for regulators in Vietnam.
Purpose The eNaira is the central bank digital currency of Nigeria. People who are interested in the eNaira and financial inclusion will seek information about eNaira and financial inclusion. Their interest in information about eNaira and financial inclusion will make it easier for them to adopt the eNaira and embrace other financial inclusion innovations such as FinTech and cryptocurrency. This paper investigates the determinants of interest in eNaira and financial inclusion information. Design/methodology/approach The data were analyzed using descriptive statistics, correlation analysis and ordinary least squares (OLS) regression. The study also used the GMM and 2SLS regression methods for robustness. Findings Using interest over time data, the findings of this study reveal that interest in financial technology (FinTech) and eNaira information are significant positive determinants of interest in financial inclusion information. Also, interest in financial inclusion is a significant positive determinant of interest in eNaira information. Furthermore, interest in FinTech information has a positive and significant correlation with interest in financial inclusion information. There is also a significant positive correlation between interest in central bank digital currency information and interest in FinTech information. The implication of the findings is that interest in information about new financial innovations, such as FinTech and eNaira, can stimulate interest in information about financial inclusion. Originality/value The literature has not examined the determinants of interest in eNaira and financial inclusion information yet.
Cryptocurrencies are electronic forms of money that are seen as credible investments; these currencies ranging from Bitcoin, Litecoin, and Etherium are increasingly viewed as a separate asset class with unique characteristics, driven by the distributed ledger technology (DLT) commonly referred to as Blockchain has increased trust in Bitcoin as a store of value and medium of exchange. This paper looks at the evolution of bitcoin and the challenges that have come to characterize the Nobel currency. From sound governance, tax compliance, data privacy and portability, cybersecurity, and fair competition; the currency in its current form exposes economies to grave economic and financial stability risks. Policymakers should regulate the functioning of bitcoin as they would a speculative asset class, by constraining risk-taking from banks by increasing requirements for deposits, whilst designing a mechanism that monitors and improve the functioning of markets that allow the proliferation of the currency.
This paper studies the effects of unexpected changes in US monetary policy on digital asset returns. We use event study regressions and find that monetary policy surprises negatively affect BTC and ETH, the two largest digital assets, but do not significantly affect the rest of the market. Second, we use high-frequency price data to examine the effect of the FOMC statements release and Minutes release on the prices of the assets with the higher collateral usage on the Ethereum Blockchain Decentralized Finance (DeFi) ecosystem. The FOMC statement release strongly affects the volatility of digital asset returns, while the effect of the Minutes release is weaker. The volatility effect strengthened after December 2021, when the Federal Reserve changed its policy to fight inflation. We also show that some borrowing interest rates in the Ethereum DeFi ecosystem are affected positively by unexpected changes in monetary policy. In contrast, the debt outstanding and the total value locked are negatively affected. Finally, we utilize a local Ethereum Blockchain node to record the activity history of primary DeFi functions, such as depositing, borrowing, and liquidating, and study how these are influenced by the FOMC announcements over time.
This paper investigates the price discovery relationships between FTT Token, issued by the cryptocurrency exchange FTX, and a set of assets and liabilities held by FTX amid a period of catastrophic financial decline by applying novel information flow measurement techniques. Results indicate that during key phases associated with the collapse of FTX, FTT Token had an informational lead over multiple assets, including cryptocurrencies such as Ethereum. Furthermore, we identify significant interactions between the FTT Token and both Robinhood shares and the token Serum, raising concerns about the direct influence of permissionless, technically valueless tokens on other assets and the potential challenges to market stability and investor protection. Our findings underscore the need for stronger policy-making, regulatory, and ethical considerations in cryptocurrency markets.
Abstract Over the last decade, the green shoots of a new economic order have emerged as decentralized technologies challenge traditional financial systems. Decentralized finance (DeFi) holds the potential to transform international business (IB) by offering accessible financial services across borders, disrupting traditional intermediaries, and promoting financial inclusion. While traditional fintech has challenged banks, DeFi operates outside legacy systems, leveraging blockchain technology and smart contracting to introduce a new range of products and services that provide first-movers with an upper hand to both expand their business across the globe as well realize cost savings on existing business. Despite offering advantages like efficiency, transparency, and security, DeFi faces regulatory uncertainties and scalability, adoption, and stability concerns. Our study explores how DeFi can seamlessly integrate into the IB space while addressing these challenges. In addition to offering insights for investors, multinational firms, and regulators, we also lay the groundwork for future IB research in the fintech domain. As the DeFi innovation unfolds, understanding and harnessing its potential can empower stakeholders to engage responsibly and effectively in this transformative landscape.
With the continuous improvement of productivity, people's living standards have continued to rise, but the problem of income disparity has become increasingly serious. This article focuses on the income disparities in China's industry and study the impact of digital financial inclusion on the it. The income disparities between employees in 29 provinces in the China Statistical Yearbook was used for analysis, and the parameters were estimated by benchmark regression analysis. Based on the results of the study, it was found that digital financial inclusion had a large impact on the five decentralized industries selected. In view of these results, this paper analyzes the reasons and draws the reasons why digital finance has contributed to the reduction of the income gap in the industry.
We construct a tractable general equilibrium model of DeFi lending to shed light on the role of pricing rules. We determine how the rule controls key equilibrium variables such as the utilization rate. Our model delivers a measure of welfare which incorporates the DeFi borrowing rate and the security of the underlying (Proof-of-Stake) blockchain, which we use to find welfare-maximizing pricing rules. Using a genuine function of the utilization rate becomes meaningful when there is parameter uncertainty. We establish conditions under which the first-best can be implemented by such a function, which we exhibit explicitly. When these conditions are not met, allowing the rule to also depend on the staking level restores efficiency. Our analysis leads to several other practical recommendations and conceptual clarifications.