Introduction. The modern world is undergoing a transformation that encompasses all aspects of the economy, technology, and social life, and the financial sector is no exception. Financial technologies are becoming the driving force of this evolution, changing approaches to money management, investments, lending, and financial services in general. Thanks to the integration of artificial intelligence, blockchain, big data, and other innovations, financial services are becoming more accessible, personalized, and efficient, opening up new horizons for business and society. At the same time, this industry faces a number of challenges, such as the need to adapt to the regulatory environment, the growth of cyber threats, and ensuring financial inclusion for broad segments of the population. The development of financial technologies is taking on unique features in different regions of the world, from innovative platforms in the United States and Europe to revolutionary changes in financial services in Asia, Africa, and Ukraine. This multifaceted nature emphasizes the importance of global cooperation, technological progress, and a strategic approach to shaping the financial ecosystem of the future, which will be not only stable but also adapted to the needs of modern society. The purpose of the research is to deepen theoretical and methodological approaches to the management of financial services and innovative technologies aimed at optimizing, simplifying and reducing the cost of financial processes. Research methods. In the process of implementing the established goal of the scientific research, both general scientific and specific research methods were used, namely: generalization, induction and deduction, financial analysis and synthesis when establishing the influence of technological and innovative factors. The results. It was found that the future of financial technologies is promising. The main areas of development will be artificial intelligence, blockchain, open banking and decentralized finance (DeFi). It is expected that financial services will become even more personalized thanks to data analytics and customer behavior prediction. It was established that the development of supervisory (SupTech) and regulatory (RegTech) technologies will allow for more effective market monitoring, risk identification and transparency in the financial sector. Innovations in the field of cybersecurity will also become a priority, as users increasingly trust digital platforms with their financial data. The role of financial inclusion is identified, which will develop through the creation of accessible mobile platforms that provide services to people even in the most remote regions. Special emphasis will be placed on the development of financial literacy so that users can effectively use new tools. It is predicted that financial technologies will create new business models and stimulate their economic growth through innovation, which will have a significant impact not only in the financial sector, but also in people’s daily lives, changing the way they interact with their finances. The future of financial technologies is a digital transformation that will make financial services more accessible, efficient and secure for everyone. Prospects. Further research should be aimed at: creating and implementing a regulatory ‟sandbox” for rapid testing of innovations in the financial sector; increasing the level of financial literacy and involvement among the population and business; forming an educational base focused on implementing the concept of open banking; developing innovations in supervision and regulation technologies that ensure financial market stability, increase process efficiency, contribute to expanding the client base, as well as identifying and minimizing risks.
Kripto paralar 21. yüzyılın ilk çeyreğine damgasını vuran finansal varlıklardır. Finansal piyasalarda işlem görmeye başlamalarının ardından kısa süre içerisinde işlem hacimlerinin artması ile çok sayıda yeni kripto para birimi üretilerek piyasada işlem görmeye başlamıştır. Kripto paraların üretim süreçleri, fiziksel varlığa sahip olmamaları, merkeziyetsiz yapıları gibi geleneksel finansal varlıklardan ayrılan özellikleri dikkat çekmiştir. Dikkat çeken bir diğer önemli özellikleri ise şüphesiz kripto para birimlerinde yaşanan ciddi fiyat dalgalanmaları olmuştur. Kripto para birimlerinin yaşamış oldukları bu fiyat dalgalanmaları piyasanın volatil yapısını ön plana çıkarmıştır. Bu nedenle kripto varlıklar arasındaki volatilite yayılımın analiz edilmesi gerek yatırımcılar gerekse araştırmacılar açısından önem kazanmıştır. Bu çalışmada kripto para piyasasında en yüksek piyasa değerine sahip 4 kripto para birimi arasındaki volatilite yayılımı analiz edilmiştir. Analizlerde BTC (Bitcoin), ETH (Ethereum), BNB (Binance Coin) ve SOL (Solano) için 13.07.2020 ile 05.09.2024 tarihleri arasına ait günlük getiriler kullanılmış ve volatilite yayılımının analizi için TVP-VAR modeli oluşturularak kripto para birimleri arasındaki dinamik bağlantı incelenmiştir. Analiz bulgularından, kripto para birimlerinin volatilitelerindeki toplam dinamik bağlantının Covid-19 Pandemisi ve Bitcoin ETF’lerinin onaylanmasına ilişkin gelişmelerden etkilendiği ve bu dönemlerde artış gösterdiği tespit edilmiştir. Ayrıca, kripto para birimleri arasındaki toplam volatilite yayılımının gücünün yüksek olmadığı, kripto para birimlerinden BNB ve BTC’nin analiz dönemi içerisinde volatilite yayıcısı, ETH ve SOL’un ise volatilite alıcısı özellik gösterdiği bulgusu elde edilmiştir. Kripto para birimleri arasında volatilite yayıcısı olan değişkenler etki güçleri açısından sıralandığında en güçlü volatilite yayıcısı olan para biriminin BNB olduğu ve bunu BTC’nin takip ettiği belirlenmiştir. Diğer yandan SOL, volatilite alıcısı olan kripto para birimleri arasında volatiliteyi en çok alan kripto para birimi olurken, ETH ise ikinci sıradadır. Kripto para birimlerinin volatilitelerindeki değişimin açıklanmasında öncelikle ilgili kripto para biriminin kendi geçmiş fiyat şoklarının etkili olduğu belirlenmiştir. Analizlerde dikkat çeken bir diğer husus ise özellikle BNB ve BTC’nin SOL’a güçlü şekilde volatilite yaymasıdır. Analize dahil edilen 4 kripto para biriminin volatilite yayılım ilişkisinin çok yüksek olmaması, aynı portföyde bulundurulabilecekleri ve birbirlerine risk bulaştırıcı etkilerinin sınırlı olabileceği şeklinde değerlendirilebilir. Bunun yanı sıra BNB’nin en yüksek volatilite yayıcısı olma özelliği dikkate alınarak portföylerin oluşturulması ve takip edilmesi, yatırım verimliliği açısından önem taşıyacaktır. Benzer şekilde SOL’un da diğer kripto para birimlerinden güçlü şekilde volatilite alması, yatırım süreçlerinde dikkat edilmesi gereken bir diğer husus olarak değerlendirilebilir.
Privately created money based on Distributed Ledger Technology (DLT) emerged in the late 2000s at the same time as mobile money. The latter, exemplified by M-Pesa, has become a prevalent form of money in several countries, especially in Africa. DLT-based cryptocurrencies, in contrast, have achieved a rather limited monetary presence. This paper compares the creation and functioning of these two forms of digital money to establish reasons for the relatively weak social acceptability of cryptocurrencies. For the most prominent cryptocurrencies, such as Bitcoin and Ether, these reasons are shown to include deficiency as units of account, high costs of use, and fragmentation of blockchains. Ultimately, these are due to the decentralized and permissionless character of privately created DLT-based monies, which invites peculiar forms of capitalist profit making, including speculation. Despite its weaknesses, such money has the potential to become widely used, but that would require state intervention, which would alter its character.
Swiss banks are at a pivotal moment as digital assets gain traction, presenting both challenges and opportunities. This study examines how Swiss banks can leverage their internal resources and capabilities to establish a competitive advantage in the digital asset ecosystem. Using the Resource-Based View and the VRIO (Value, Rarity, Imitability, and Organization) framework, this study investigates the strategic importance of key services such as custody, staking, and tokenization. Drawing on expert interviews with Swiss banking leaders, this research identifies these services as vital for maintaining Switzerland’s financial leadership. Findings suggest that Swiss banks’ established reputation for trust, combined with regulatory clarity under the Distributed Ledger Technology Act, creates a strong foundation for digital asset adoption. While digital asset custody services address the growing demand for security, tokenization presents significant growth potential, particularly in real-world asset markets. This study concludes that Swiss banks can sustain their competitive edge by investing in blockchain expertise, fostering fintech partnerships, and enhancing educational initiatives. By combining traditional banking strengths with innovative digital asset services, Swiss banks are well positioned to capitalize on this evolving financial landscape.
The implementation of open banking frameworks together with Application Programming Interfaces (APIs) creates significant market changes because they boost financial innovation as well as customer satisfaction while promoting market competition. The research study examines the impact of regulatory movements along with technical advancements which rebuilds conventional banking systems through open banking processes. The security of financial data exchange facilitated through open banking APIs allows financial institutions to link with third-party providers for delivering state-of-the-art personalized services and better access to credit and seamless payments. This analysis focuses on the opportunities along with issues that come from using open banking technology together with the necessity of standardizing API protocols because of privacy threats and digital security vulnerabilities. Open banking serves as a technology that builds financial inclusion by giving consumers full control of their financial data. The findings from industry studies with case examples demonstrate how open banking joint with APIs transitions finance toward a decentralized user-focused system that connects different entities. The research shows that open banking success depends on the teamwork between stakeholders while strong regulatory guides and innovative efforts drive complete exploitation of its potential
Enforcing a delay between deposits and withdrawals within decentralized finance protocols may make them more secure but less composable. A delay makes flash loan attacks more expensive, but restricts interactions between protocols. In this work, we analyse public blockchain data to determine if this concern is warranted in practice. We measure the duration between corresponding direct deposit and withdrawal function calls across several decentralized finance protocols on Ethereum. We show that direct callers of DeFi protocols typically leave assets locked in these protocols for many blocks, meaning that artificial withdrawal delays are not likely to have a negative impact on user experience.
The purpose of this article is to explore the key aspects of cryptocurrency exchange systems, including their role in storage, exchange, and token staking. By examining the characteristics and features of these exchanges, cryptocurrency users can make informed decisions about how to allocate and store their funds effectively.There are two main types of cryptocurrency exchanges: centralized exchanges (CEX) and decentralized exchanges (DEX). Centralized exchanges are governed by a central authority that manages user funds, providing a more streamlined and user-friendly experience. However, this centralization creates security risks, as users must trust the exchange with their assets. If the platform is compromised or experiences technical failures, users may suffer significant losses. Moreover, centralized exchanges often require identity verification and other regulatory procedures, which can be a barrier for those who prioritize privacy or anonymity in their transactions. On the other hand, decentralized exchanges (DEXs) operate without a central governing body, allowing users to retain control over their funds and trade directly with each other using smart contracts on a blockchain. This decentralization reduces reliance on intermediaries and enhances privacy, but it also presents challenges. DEXs tend to be more complex to use and may require greater technical expertise.Future research should examine how various groups – ranging from individual investors to large financial institutions – are incorporating cryptocurrency exchanges into their financial strategies.
This study provides a bibliometric analysis of the research trends in financial derivatives within the banking and finance literature. By examining citation patterns, co-authorship networks, and keyword co-occurrences, the study identifies key research themes and their evolution over time. The analysis reveals the central role of derivatives in risk management and financial stability, particularly in the wake of financial crises. It highlights the growth of computational techniques in derivatives pricing and risk management, with an increasing focus on advanced models and simulations. The study also explores the emerging influence of blockchain technology and decentralized finance in reshaping the derivatives landscape. The bibliometric map underscores the global nature of financial derivatives research, with significant contributions from the United States, China, and the United Kingdom. The study provides valuable insights for scholars, practitioners, and policymakers, suggesting areas for further research, particularly in regulatory frameworks, pricing models, and the integration of new technologies in the derivatives market.
Embedded finance represents a transformative shift in how financial services integrate within non-financial platforms, creating seamless user experiences that eliminate traditional friction points. This comprehensive article explores how companies have leveraged embedded payment infrastructures to create extensive ecosystems that transcend their original business models. The technical infrastructure powering these innovations—including API-first banking, regulatory technology, and microservices architecture—enables real-time processing at scale while maintaining security and compliance. The evolution toward Super Apps demonstrates how financial transactions can become invisible utilities within broader digital experiences, while artificial intelligence enhances these platforms through predictive analytics and conversational interfaces. Despite technical challenges related to data security, scalability, and cross-border complexity, emerging trends including decentralized finance integration, context-aware services, and embedded insurance promise continued innovation in this rapidly developing field
This comprehensive article explores the rapid advancement of financial technologies (FinTech), highlighting their transformative role in enhancing transaction efficiency and security across global financial markets. The integration of artificial intelligence and machine learning in financial services has revolutionized fraud detection, credit assessment, and customer service delivery while presenting new implementation challenges. As digital payment systems and banking platforms continue to evolve from early electronic transfers to sophisticated mobile applications and neobanks, they reshape traditional financial models and expand access to previously underserved populations. The interplay between emerging technologies like distributed ledger systems, cloud computing, and biometric authentication creates a dynamic ecosystem where established institutions and innovative startups both compete and collaborate. Regulatory frameworks worldwide adapt to balance innovation facilitation against consumer protection, while specialized compliance technologies address increasingly complex requirements. Despite cybersecurity threats including data breaches and ransomware attacks, advanced security measures provide essential protection for the digital financial landscape.
This study explores the transformative potential of blockchain technology in revolutionizing cross-border payment systems. Traditional methods are hindered by inefficiencies such as high transaction fees, prolonged processing times, and opaque operations, which impede seamless global financial interactions. Blockchain, with its decentralized and immutable ledger, offers a secure and transparent alternative that can significantly streamline payment processes. This paper examines how blockchain can facilitate real-time settlements, eliminate intermediaries, and enhance data integrity, thereby reducing costs and improving efficiency. Further, it addresses the practical applications and regulatory challenges associated with integrating blockchain into existing payment infrastructures. Ultimately, this research aims to provide actionable insights for developing a more efficient, transparent, and cost-effective cross-border payment ecosystem.
Heike Joebges, Hansjörg Herr, Christian Kellermann
Abstract Crypto assets’ partial money-like use promotes toxic developments in the financial system. Even though crypto assets might be regarded as close substitutes to traditional money, we show that they lack important functions of money. Traditional fiat money requires several interacting institutions to stabilize its value and regulate its use. In our analysis, we elaborate on the risks associated with the difficulty of setting up regulatory institutions in the crypto sphere and the likelihood of periods of high volatility as well as their repercussions on the traditional financial system due to reciprocal integration. The shift of banking functions into the unregulated area of decentralized finance triggers a new quality of instability in the global financial system with an increasing probability of effects on the real economy. Regulation of crypto assets remains an urgent issue.
This study employs wavelet analysis to examine the contagion between cryptocurrency returns and sovereign bond yields within the West African Monetary Zone (WAMZ) economies, capturing both the frequency-dependent nature of the relationship and time-varying behavior. We analyze daily data spanning 01/26/2021 to 10/07/2022, with a total observable value of 444. The study selected periods of uncertainty within financial markets, namely, the COVID-19 pandemic and the Russia–Ukraine war because there was a need to understand how securities react during such times to help investors plan accordingly. Our results show a negative correlation between sovereign bond yields and cryptocurrency returns, suggesting that investors can use these asset classes as hedge agents, diversifiers, and safe-haven instruments. These findings provide valuable insights for investors and policymakers, shedding light on the potential interdependencies and diversification benefits between these two asset classes.
We explore the adoption of graph representation learning (GRL) algorithms to investigate similarities across services offered by Decentralized Finance (DeFi) protocols. Following existing literature, we use Ethereum transaction data to identify the DeFi building blocks. These are sets of protocol-specific smart contracts that, similarly to “financial LEGO bricks”, are utilized in combination within single transactions and encapsulate the logic to conduct specific financial services such as swapping or lending cryptoassets. We propose a method to categorize these blocks into clusters based on their smart contract attributes and the graph structure of their smart contract calls. We employ GRL to create embedding vectors from building blocks and agglomerative models for clustering them. To evaluate whether they are effectively grouped in clusters of similar functionalities, we associate them with eight financial functionality categories and use this information as the target label. We find that in the best-case scenario purity reaches .888. We use additional information to associate the building blocks with protocol-specific target labels, obtaining comparable purity (.864) but higher V-Measure (.571) and discuss plausible explanations for this difference. In summary, this method helps categorize existing financial products offered by DeFi protocols, and can effectively automatize the detection of similar DeFi services, especially within protocols.
Tarun Chitra, Theo Diamandis, Nathan Sheng, Luke Sterle · 5 authors
Decentralized perpetuals protocols have collectively reached billions of dollars of daily trading volume, yet are still not serious competitors on the basis of trading volume with centralized venues such as Binance. One of the main reasons for this is the high cost of capital for market makers and sophisticated traders in decentralized settings. Recently, numerous decentralized finance protocols have been used to improve borrowing costs for perpetual futures traders. We formalize this class of mechanisms utilized by protocols such as Jupiter, Hyperliquid, and GMX, which we term~\emph{Perpetual Demand Lending Pools} (PDLPs). We then formalize a general target weight mechanism that generalizes what GMX and Jupiter are using in practice. We explicitly describe pool arbitrage and expected payoffs for arbitrageurs and liquidity providers within these mechanisms. Using this framework, we show that under general conditions, PDLPs are easy to delta hedge, partially explaining the proliferation of live hedged PDLP strategies. Our results suggest directions to improve capital efficiency in PDLPs via dynamic parametrization.
Francesco Maria De Collibus, Carlo Campajola, Claudio J. Tessone
Abstract The transfer velocity of money is a macroeconomic quantity that measures the frequency of exchanges in an economy. For cryptoassets it can be exactly measured adopting a new approach, MicroVelocity. In this study we apply the framework to Ether, the native cryptocurrency of the Ethereum blockchain, to investigate velocity and its top contributors and how they can be characterised in the Ethereum ecosystem. While the inequalities and heterogeneity in wealth are well known, we here find that the same inequalities occur as well for MicroVelocity distribution and that this inequality is not explained just by wealth, but rather by the behaviour and economic activity of each individual agent.
Rafael Belchior, Thomas Hardjono, Alex Chiriac, Venkatraman Ranakrishna
It is time for the legacy financial infrastructure to seamlessly connect with modern, decentralized infrastructure. Although it is increasingly evident that decentralized infrastructure for finance (namely distributed ledgers) will coexist with and complement legacy infrastructure, it is also clear that such interoperability efforts carry new risks and concerns. In particular, managing the range of heterogeneous (and not well-established) infrastructure brings security, privacy, and regulatory issues. The first step to overcome some of these challenges is to recognize that in many deployment instances using distributed ledgers, the purpose of the ledger is to share resources among the community members. The second step after recognizing that borders exist is to understand that interoperability across systems can be best achieved through the use of standardized service interfaces (or application programming interfaces (API)). In this paper we use the term ledger gateways (or simply gateways) to denote the computer and software systems that implement the standardized service interfaces into a distributed ledger. The main purpose of a gateway is to communicate with other peer gateways that implement the same standardized service interface. Among others, peer gateways perform the transfer of data and value across borders (legal or national borders). Gateways also become a mechanism to manage a permissioned environment, where abiding by laws and regulations is crucial for business compliance (e.g., EU General Data Protection Regulations (GDPR), EU MiCa regulation on digital assets, FAFT Recommendation 15, ISO 27001.
David Cisar, Benjamin Schellinger, Jens-Christian Stoetzer, Nils Urbach · 7 authors
Abstract Corporate bonds are an attractive option for corporate financing. However, current bond markets face many challenges and inefficiencies, resulting in high transaction costs (TAC). In recent years, technological advancements like blockchain technology have enabled the possibility of reducing TAC in bond markets. Even though practice experiments with such solutions, academic literature lacks generic design knowledge under the TAC lens to design blockchain-based bonds. Thus, our research follows the design science research (DSR) paradigm to design and develop a bond prototype using the Ethereum blockchain protocol. Our results highlight the capability of blockchain-based bond markets to reduce TAC in the three dimensions of asset specificity, uncertainty, and transaction frequency. Further, our research provides design principles to contribute to both practice and the academic discourse on developing blockchain-based bond markets with reduced TAC.
This study delved into the complex world of cryptocurrencies, analyzing their behavior, profitability, and volatility. Through a thorough and meticulous analysis of the 2021 – 2023 period, the volatile nature of these digital assets was revealed, where profits could be suddenly affected by external events. Bitcoin, two of the cryptocurrencies with the largest presence in the market, were the subject of a thorough analysis using sound statistical methodologies. Descriptive statistics were employed to characterize the overall behavior of cryptocurrencies, including measures of central tendency, dispersion, and distribution. Additionally, normality and stationarity tests were used to choose the best variant of the GARCH model, which was EGARCH, to estimate conditional volatility, future volatility and price profitability, allowing to identify patterns and dynamics in their variability. The results of the study revealed that cryptocurrencies, while presenting attractive potential returns, also carry a high degree of volatility. However, thanks to the in-depth analysis of the behavior of these assets we can identify opportune moments to make purchases, sales or strategic investments. The main goal of this study is to provide investors with the information needed to make strategic and informed decisions about their cryptocurrency investment
This study examines the ongoing debate between Decentralized Finance (DeFi) and Centralized Finance (CeFi), analysing their unique advantages and challenges within the rapidly evolving financial landscape. The objective of this research is to argue for the convergence of DeFi and CeFi to create an innovative and secure financial ecosystem that balances accessibility with security, using Kazakhstan as a case study. The study employs comparative analysis and case-study methodology to explore Kazakhstan’s regulatory approach to digital assets. The focus is on understanding how licensing, anti-money laundering (AML) protocols, and consumer protection measures can support the integration of DeFi and CeFi. Primary data includes an analysis of Kazakhstan’s regulatory framework for digital assets, statistical data on AML implementation, and levels of consumer protection within the country. Findings indicate that a hybrid regulatory model effectively bridges the operational differences between DeFi and CeFi, fostering inclusivity and economic growth while safeguarding consumer interests. Kazakhstan’s regulatory focus on licensing and AML protocols illustrates that a balanced regulatory approach can accommodate both technological progress and necessary protections for financial participants. The study concludes that a convergence of DeFi and CeFi through a hybrid regulatory model can lay the foundation for a sustainable digital financial environment that is accessible, innovative, and secure. Future studies are encouraged to explore the role of emerging technologies, such as quantum computing, and examine the socio-economic impacts of DeFiCeFi integration on financial inclusivity for underserved populations.
Digital currencies like Bitcoin and Ethereum are reshaping the financial landscape by challenging traditional banking and commerce. These technologies hold significant potential to enhance financial inclusion by providing access to underserved populations and streamlining cross-border payments, making transactions faster and more cost-effective. They also empower decentralized finance (DeFi), enabling innovative financial services without intermediaries. Blockchain, the foundation of digital currencies, facilitates secure, decentralized, and programmable systems, supporting key innovations like asset tokenization and Central Bank Digital Currencies (CBDCs). These advancements bridge the gap between digital and traditional financial systems, promoting efficiency and accessibility. Despite their promise, digital currencies face challenges, including cybersecurity threats, market volatility, and fragmented regulatory frameworks. Case studies on CBDCs and private-sector blockchain initiatives demonstrate viable integration pathways and underline the need for robust governance. By implementing balanced policies, stakeholders can harness the benefits of digital currencies while mitigating associated risks. These measures will be crucial to fostering a stable, inclusive, and innovative financial ecosystem that addresses global economic disparities and drives sustainable growth.
Over the past decade, digitalization, which has become a key driver of innovation in the financial industry, has led to the development of new products and financial services. The services and opportunities provided in the field of decentralized finance have similar characteristics to traditional financial services. The lack of sufficient experience in the functioning of the decentralized finance sphere determines the relevance of the study of the content and problems of the development of this format of financial organization. The object of study is the relations arising in the process of providing financial services in traditional and decentralized finance. The subject of the study is the impact of decentralized finance on the activities of traditional financial intermediaries. The purpose of the study is to determine the aspects of the impact of decentralized finance on the activities of traditional financial intermediaries. The objectives are to study the theory of trust in relation to decentralized finance, identify problems of their development, assess the challenges and prospects for the impact of decentralized finance on the activities of traditional financial intermediaries. The authors use general scientific and special methods, including system, comparative analysis, generalization, scientific abstraction. The scientific novelty of the study lies in a comprehensive assessment of the impact of decentralized finance on the activities of traditional financial intermediaries through the prism of the capabilities of the decentralized finance system at the current stage of financial market development. The authors conducted a study of the theory of trust in relation to decentralized finance, and also proposed forms of ensuring trust in financial services provided in the traditional (TradFi) and decentralized financial systems (DeFi). To assess the challenges and prospects of decentralized finance and their impact on the activities of traditional financial intermediaries, a PEST analysis was conducted, identifying groups of political, economic, technological and socio-cultural factors of influence. It is concluded that the influence of the decentralized finance sphere on the activities of traditional financial intermediaries will expand due to the increase in the market capitalization of DeFi and the spread of systemic risks characteristic of TradFi. Focus on minimizing risks should facilitate the use of DeFi services by traditional financial intermediaries in the context of creating and developing innovative projects. The conducted research can be useful both for users of traditional and decentralized finance services and for regulatory and supervisory authorities.