Marianne Bechara, Wouter Bossu, Yan Liu, Arthur Rossi
Fintech presents unique opportunities for central banks. The rapid changes in technology that are transforming the financial system will allow central banks to enhance the execution of various of their core functions, such as currency issuance and payment systems. But some aspects of fintech pose major challenges. Central banks have always been at the cutting edge of financial technology and innovation. In the past, the invention of the banknote, the processing of payments through debits and credits in book-entry accounts, and the successive transitions of interbank payment systems from the telegraph to internet protocols were all transformative innovations. Today, central banks are facing new and unprecedented challenges: distributed ledger technology, new data analytics (artificial intelligence [AI] and machine learning), and cloud computing, along with a wider spread of mobile access and increased internet speed and bandwidth. The purpose of this note is to discuss the authors’ preliminary views on how, from a legal perspective, central banks can best deal with the impact of fintech on their governance. These preliminary views are based on a review of central banks’ reaction thus far to the challenges posed by fintech to the legal foundations of their governance.
Purpose-Our health and social lives and financial markets have been significantly influenced by the Covid-19 pandemic. Even though the coronavirus' overall economic impacts are not yet known, a financial market reaction to the pandemic is observed. Studies show that the pandemic has strong impact on stock markets and cryptocurrency markets and also increases uncertainty. Cryptocurrency known as virtual money is one of the most important developments of digitalization. Cryptocurrencies discussed during the past few years and, in particular, a new investor portfolio, are highly popular. Cryptocurrency markets began to pickup with the arrival of bitcoin. These markets have started to be demand like stock markets. The purpose of this study is to establish the elements influencing individual financial investment decisions both on the cryptocurrency market and in the stock markets, with the performance of cryptocurrencies growing positively in conjunction with the pandemic in 2020. Methodology-While making financial decisions, individuals want to know how the market is carried over and they act accordingly. For this reason, both stock and crypto money markets have been examined in order to see the behaviour of individuals. The objective of this research is to establish the elements that influence individual financial investment decisions on both cryptocurrency and equity markets, since cryptocurrencies have a positive increase in performance parallel to the globally lower pandemic interest rates in 2020.In the study, it was collected with the data by survey technique. The survey examined investor behaviour in financial markets based on individual investor demographics on 428 individual investors. Findings-The study, which was collected with the participation of 428 individual investors with the survey technique, shows that the majority of crypto money users are between the ages of 25-34 according to gender, age and education level and are university graduates. When the data of the survey applied to determine the investment tendencies of individual investors are evaluated, it has been observed that the investors are mostly willing to invest in foreign exchange and cryptocurrencies arouse considerable curiosity due to their high return performance. However, participants believed that cryptocurrency market is riskier than stock markets. In our article, the level of perception about how cryptocurrencies are an investment tool is also not clear, and it has been revealed that investors primarily obtain information about this market through social media channels. Conclusion-In the financial sector, where competition is intense, financial decisions taken by investors are of great importance. Increased pandemic risk factor has led to ambiguities in investment decision-making. Global uncertainty continues despite the development of the vaccine. Corruption in cryptocurrency exchange, often mentioned in recent days, led individuals to research and to learn more about themselves in this area, who are investing in this industry or planing to do so. Our survey on investor behaviour in financial markets, which was carried out with the participation of 428 people over the social platform, was also prepared to be more on crypto money. According to the survey, developments regarding cryptocurrencies showed that the State had to regulate. The recent news about corruption reveals that cryptocurrency markets will continue to be precepted negatively for some time, but it shows that incidents are rapidly forgotten.
The emergence of digital currencies such as Bitcoin and the underlying blockchain and distribution ledger technology have attracted significant attention. These developments have raised the possibility of considerable impacts on the financial system and perhaps the wider economy. This paper addresses the question of whether a central bank should issue digital currency that could be used by the general public. It begins by discussing the possible motivations for a central bank to issue a digital currency. The paper then sets out a benchmark central bank digital currency (CBDC) with features that are similar to cash. The implications of such a digital currency are explored, focusing on central bank seigniorage, monetary policy, the banking system and financial stability, and payments. Finally, a CBDC that differs from the benchmark digital currency in a significant way is considered.
Alim Al Ayub Ahmed, Harish Paruchuri, Siddhartha Vadlamudi, Apoorva Ganapathy
Digital finance is assuming a significant part in the arrangement of financial services all over the world. Fast growth with digitalization, data analysis, and computing capacities allows for a whole new scope of financial services and transactions. This financial development empowered by digital financial technology (Fintech) has pulled in a ton of attention, as it could offer some potential for economic growth and development. As a part of the Fintech environment, cryptography has started to grow quickly and digital assets are acquiring in favorability among financial bankers and investors. Human behavior as they engage with financial activities is personally associated with the noticed market elements. However, with many existing theories and studies on the fundamental motivations of the conduct of people in financial frameworks, there is still restricted experimental derivation of the behavioral conduct of the financial agents from a definite market analysis. Cryptocurrency technology has given a map to this analysis with its voluminous data and its transparency of financial transactions. It has empowered us to perform inference on the personal conduct standards of users in the market, which we analyze in the bitcoin and ethereum cryptocurrency markets. In our study, we initially decide different properties of the cryptography users by complex network analysis. Financial cryptography is a difficult subject that necessitates abilities from a variety of seemingly unrelated fields. There is a serious risk that attempts to establish Financial Cryptography frameworks would simplify or omit key disciplines because they are caught between central banking and cryptography. This paper discusses research that attempts to limit the scope of Financial Cryptography. This model should assist the project, administrative, and requirements personnel by classifying each discipline into a seven-layer model of basic nature, where the link between each adjoining layer is evident. While this model is shown as effective, all models have cutoff points. This one does not present a design system or a protocol agenda. Furthermore, given the model's initial adaptation and the field, it should be viewed as a suggestion of complexity rather than a definitive approach.
Bitcoin, son yüzyılın en meydan okuyan girişim örneklerindendir. Bu doğrultuda Bitcoin’e olan ilgi de hem kripto borsalarda hem de akademik literatürde çokça yer almaktadır. Genelde yapılan çalışmalarda, Bitcoin fiyatı üzerinde etkili olabileceği düşünülen finansal varlık rasyoları dikkate alınmaktadır. Bu çalışmada ise gazete ve medya haberlerinde Para Politikası Belirsizliği (MPU) ile ilgili yer alan haberler dikkate alınarak oluşturulan endeksler kullanılmıştır.Bu çalışmada, Ağustos 2010-Ağustos 2020 dönemlerinde Bitcoin fiyatı ile ABD ve Japonya Para Politikası Belirsizliği (MPU) endeksleri arasında aylık veriler kullanılarak, Hatemi-J (2012) asimetrik nedensellik testi çalıştırılmıştır. Çalışmanın sonunda ABD ve Japonya para politikası belirsizliği ile Bitcoin fiyatları arasında ne tek yönlü ne de çift bir nedensellik ilişkisine rastlanmamıştır. Bu çalışmada yer alan veriler ve değişkenler göz önüne alındığında, ABD ve Japon para politikası belirsizliği ile ilgili haberler ile Bitcoin fiyatları arasında bir ilişki olmadığı sonucuna varılmıştır
This paper studies to what extent the cost of operating a proof-of-work\nblockchain is intrinsically linked to the cost of preventing attacks, and to\nwhat extent the underlying digital ledger security budgets are correlated with\nthe cryptocurrency market outcomes. We theoretically derive an equilibrium\nrelationship between the cryptocurrency price, mining rewards and mining costs,\nand blockchain security outcomes. Using daily crypto market data for 2014-2021\nand employing the autoregressive distributed lag approach - that allows\ntreating all the relevant moments of the blockchain series as potentially\nendogenous - we provide empirical evidence of cryptocurrency price and mining\nrewards indeed being intrinsically linked to blockchain security outcomes.\n
The use of digital money creates not only threats, but also opportunities for economic development, but in Latvia and the Baltic countries, they are not sufficiently researched and not widely spread. The paper aims to identify the reasons for the lagging behind of the Baltic countries and Latvia in the development of the cryptocurrency market and to develop recommendations for improving its regulation and functioning. Based on the methods of cross-country, statistical and sociological analysis, the national factors of differences in the functioning and regulation of cryptocurrencies in Latvia, Estonia, and Lithuania have been identified and the risks of its use for illegal activities have been assessed. It is shown that the role of cryptocurrencies in the financial markets of the Baltic States is determined by the degree of their use for payments and investments, which depends on their recognition by the state and investors. It has been revealed that the definition of the concept of cryptocurrency in the EU and the Baltic countries, primarily in the money laundering and terrorist financing (ML/TF) directives, does not stimulate the use of its positive features. A correlation between the restrained attitude towards cryptocurrencies in Latvia and its large-scale business relations with the CIS countries with a higher proportion of shadow economy, caused by the peculiarities of its history and geographical location, has been revealed. The Latvian banking system, under the influence of international regulators, has become less appropriate for operations of non-residents from the East, which increases the risk of using cryptocurrency for ML/FT purposes. The factors of motivation, advantages and difficulties of the businessmen of the Baltic countries they face when dealing with cryptocurrency have been identified, and a discrepancy in the regulation of taxation of transactions with cryptocurrency and the respective activities in Latvia has been revealed. Recommendations are given to the state and private investors pertaining to the integration of cryptocurrencies into the economic space, the implementation of which will contribute to the development of the digital economy and growth of wealth of Latvian residents. The results of the study can be used to improve government regulation and private investments in the cryptocurrency market, as well as in the study and further research of this problem
Decentralized Finance (DeFi) is transforming the financial services industry through blockchain technology, smart contracts, and decentralized protocols. By eliminating intermediaries such as banks and brokers, DeFi enables transparent, efficient, and accessible financial transactions. The ecosystem includes decentralized exchanges, lending and borrowing platforms, liquidity pools, yield farming, and tokenized assets, which have significantly influenced global financial markets.This study examines the structure of the DeFi ecosystem and its market implications using a conceptual and analytical approach. The findings highlight key benefits such as improved financial inclusion, reduced transaction costs, enhanced transparency, faster transaction processing, and increased financial innovation. Smart contracts automate financial operations, while decentralized exchanges and liquidity pools create new models for asset trading and liquidity provision. Despite these advantages, DeFi faces several challenges, including cryptocurrency price volatility, smart contract vulnerabilities, cybersecurity threats, governance issues, and regulatory uncertainty. The interconnected nature of DeFi protocols may also create systemic risks that can affect the broader ecosystem. The study concludes that DeFi represents a major advancement in financial technology by bridging traditional finance and blockchain-based systems. However, sustainable growth requires stronger security mechanisms, transparent governance frameworks, and adaptive regulatory policies. Hybrid models combining decentralized innovation with effective regulation are likely to shape the future of financial services.
The development of cryptocurrency as a means of exchange without legal backing and invisibility of the identity of operators has posed peculiar challenges such as illicit financial flow and terrorism amongst others, to the country. This study, therefore, sought to examine the effect of cryptocurrency on the Nigerian economy. The study was hinged on social exchange theory. Secondary data were obtained from the CBN statistical bulletin and Global Financial Integrity Report for a period of six years from 2013 to 2018. The data were analyzed using a simple regression model. The result shows that R is 5.8% which means that there is a low positive relationship between cryptocurrency and the level of economic development in Nigeria. It further shows an adjusted R square of -24.6 which depicts that cryptocurrency has a low inverse effect on the level of economic development in Nigeria. In conclusion, the computed p-value of 0.913 which is higher than the set p-value of 0.05 shows that cryptocurrency does not have a significant effect on the level of economic development in Nigeria. Hence, it is recommended that, in order to sustain economic development from the activities of cryptocurrency in Nigeria, the Central Bank of Nigeria needs to ensure that laws and mechanisms are put in place to adequately capture the activities of cryptocurrency in the country.
In a world of technological growth, cryptocurrencies as a new generation means of payment and trade between economic entities are one of the most discussed topics of the XXI century. The entry of digital money into the economic space can be defined as a phenomenon that in the conditions of digitalization at national and supranational level are an innovation in the financial system. Globally, the rapid penetration of cryptocurrencies over the last decade has been seen as controversial in the public sphere. Digital money has many characteristics that distinguish it from traditional fiat money, and therefore economic entities focus on their implementation in the business environment. In connection with this ongoing interest, the present study aims to track and analyze the impact of digital money on the global economy. As a result of the rise of cyber technology, quite logically blockchain technologies and cryptocurrencies find many applications in the business world.
The emergence of cryptocurrency has introduced a transformative force in the global financial landscape, challenging the conventional structures of traditional financial markets. This paper explores the dynamic relationship between digital currencies and established financial systems, focusing on areas such as investment behavior, regulatory responses, market volatility, and the evolving role of financial institutions. It highlights how cryptocurrencies, particularly Bitcoin and Ethereum, have begun to influence asset allocation strategies, capital flows, and risk perceptions among investors. Furthermore, the paper examines the integration of blockchain technology in financial services and how its decentralized nature poses both opportunities and threats to conventional banking practices. While cryptocurrencies have opened up avenues for innovation and financial inclusion, their unregulated nature raises concerns regarding market stability and security. This study aims to provide a comprehensive understanding of the implications of cryptocurrency growth for traditional financial markets, suggesting the need for adaptive regulatory frameworks and strategic responses from financial institutions.
The purpose of this study was to analyse and understand the attitude of gender towards cryptocurrency. The questionnaire was formed to collect data about knowledge, experience, trust, and other investment factors of the gender towards cryptocurrency. This paper will be beneficial to the upcoming or existing companies of cryptocurrency to estimate their future viability based on gender. The research was also aimed to the detection of gender differences within the areas of awareness, investing, mining and paying with the cryptocurrencies. The research aimed to analyse the data collected and conclude the overall attitude of male/ female towards cryptocurrency. The findings confirmed the existence of gender differences in attitude towards crypto currencies, as the male respondents were more willing to use the crypto currencies in most of the cases.
Feng Guo, Stephanie Walton, Patrick Wheeler, Yiyang Zhang
ABSTRACT This study examines factors that influence a public firm's decision to early-adopt blockchain technology. Blockchain technology has the potential to disrupt how firms collect, process, and maintain information about a wide range of firm activities including transactions and supply chain interactions. We examine several determinants of early blockchain adoption including patented technology, agency costs, complexity, and external monitoring. Our results suggest that blockchain early adoption involves opportunistic managerial behavior. Further, firms with greater technology innovations, proxied by number of patents, are more likely to disclose early adoption, possibly to overcome productivity concerns or attract inter-firm opportunities. We also examine the consequences of early adoption using a market-based approach. Our results suggest that blockchain adoption could be a lengthy and costly process. Our study provides evidence on why firms adopt this disruptive technology and informs regulators and policy makers on how managers can influence the blockchain early adoption decision.
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Although societies are becoming increasingly secularized, religion continues to play an important role worldwide. However, few studies have focused on how religion affects the entrepreneurial emergence novel markets. To address this gap, I examine the impact of Islam, as a decentralized belief system, on entrepreneurship in the context of developing Islamic investment fund markets across countries. I focus on religious diversity within Islam as an instance of intrainstitutional complexity and analyze a country-level panel dataset of Islamic investment funds in addition to complementary qualitative data. Intriguingly, I find that religious diversity within Islam plays a paradoxical role: it promotes the entrepreneurial supply of Islamic investment funds in a country, but it also reduces the investor demand for these funds. This complex effect is moderated by interinstitutional forces: the market logic positively moderates the effect on supply dynamics, whereas the state logic negatively moderates the effect on supply and positively that on demand. This study contributes to the research on religion and market emergence, institutional complexity, and Islamic finance.
<em>This article looks at whether financial regulations and Government policies have an impact on microfinance institutions operations in Ghana. It also looks at contributions that regulations and policies have on microfinance sector development in the country. The methodology for this paper is purely qualitative. The needed information was gathered from primary & secondary sources. The primary data source used face to face interviews, telephonic and through emails conducted with regulators, policymakers and microfinance institutions managers, using interview guide and focus group discussion guide. The secondary source was through literature reviews, books, journals, and the internet. The study revealed that financial regulations and government policies have contributed immensely to microfinance sector development through, training & capacity building, checks & balances, protecting customers & depositors, financial soundness and financial inclusion. However, despite the contribution of regulations and the policies to the sub-sector, the result of the study also identified poor regulations, lack of proper decentralization, lack of knowledge and weakness of regulators as problems with financial regulation. Furthermore, it also found out that, the policies formulated are weak and the implementation, monitoring, and supervision of the institutions is insufficient and ineffective. This article, therefore, recommends that Apex bodies should be involved in monitoring and supervision, minimum capital requirements should be made moderate, powers should be decentralized to the regional level for the effective functioning of regulations & policies in the country.</em> <strong><em>Keywords</em></strong><em>: Bank of Ghana, Regulations, Ministry of Finance, Policy Formulation, Microfinance Institutions.</em>
The article considers the problematic issues of the functioning of cryptocurrency in Ukraine. The risks that provoke cryptocurrency as a tool for the money laundering and the financing terrorism in Ukraine are studied. The level of crime and the use of cryptocurrency in the sphere of money laundering are determined. Topical issues affecting the features of the detection and investigation of a crime are considered.<br> Anti-money laundering law of Ukraine openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system. Furthermore, FATF report on terrorism financing noted the importance of links between financial tools and wider counter-terrorist activity to combat terrorist financing.<br> Terrorism, being a socially dangerous and difficult to predict phenomenon, is changing its forms, methods, but the need for terrorist organizations to collect, move, and use money is always urgent. The legalization (laundering) of proceeds of crime, as well as the financing terrorism, poses a serious threat to national security of Ukraine and its financial system. The use of computer technologies to commit crimes increases their social security, generates new ways of committing them, and simplifies the very process of committing and masking their tracks. Cryptocurrencies are popular on the dark web because they provide a convenient method of obfuscating identities and transaction details. In addition, the absence of rules for exchanges and points of sale, the obligation to identify the e-wallet owner and a clear legal regulation of the use of cryptocurrencies in general, create favorable conditions for criminals. Investigation of such crimes creates considerable difficulties, given the lack of capabilities of law enforcement agencies from the current level of technological and software criminal activity. The author also found out the advantages of such a currency, which determine its use by criminals, and examined possible ways to counter and combat such crime.
Amid pressing demands to tackle critical sustainable development goals, governments in developing countries face the additional complex task of embracing new digital technologies such as blockchains. This paper takes a conceptual approach and presents a framework that interlinks development, technology, and governments while highlighting the relevance of state capacity and democratic governance in such dynamics. With this in hand, blockchain technology is revisited from the perspective of governments in the Global South, identifying in the process key traits and presenting a new typology. Research gaps regarding the relationship between this technology and both development and developing country government are also identified. A closer look at some on the ground blockchain implementations yields some early evidence on the advantages and risks involved in the process. The paper closes with a discussion of the results within the proposed framework suggesting additional research themes. It also provides some basic guidance for development practitioners interested in enhancing current programs using blockchains as an enabler.