Blockchain Papers

Collective Shift

Discover how Tokemak is revolutionizing decentralized finance through its advanced liquidity management solution. Get insight into the protocol's mechanism, governance structure, token purpose, and the significance of its emergence in the DeFi world.

Li Chen, Difang Huang, Shouyang Wang

Cryptocurrency regulation faces a fundamental mismatch between static rules and rapidly transforming markets. We demonstrate that Bitcoin alternates between bounded and unbounded price regimes, requiring adaptive rather than uniform regulatory frameworks. Using extreme value theory on over a decade of Bitcoin data, we show that tail risk characteristics switch between finite-limit and heavy-tailed regimes, with profound implications for investor protection, capital requirements, and systemic risk management. Traditional approaches either overregulate during stable periods or underprotect during volatile regimes. We propose regime-contingent regulatory frameworks that automatically adjust oversight intensity based on statistical detection of tail risk characteristics. Backtesting over 2016–2025 demonstrates that the adaptive framework reduces average capital requirements by 79% overall and by 84% during bounded regimes while escalating protections before major crashes, outperforming static Basel III-style rules. Robustness analyses across multiple window lengths (90, 180, 365, and 730 days), thresholds, and bootstrap specifications confirm that regime-switching is a persistent structural feature of Bitcoin markets. Implementation requires international coordination, transparent methodology, and clear adjustment protocols.

Varona Castillo Luis, Gonzales Castillo Jorge R.

This research examines the determinants of Bitcoin (BTC) valuation from January 2011 to December 2025 using Autoregressive Distributed Lag (ARDL) models. The empirical evidence supports the hypothesis that the monetary policy of the United States Federal Reserve—specifically liquidity expansion and interest rate adjustments—drives price dynamics, confirming a pro-cyclical nexus. At the microeconomic level, the density of active institutional addresses and the marginal cost of production significantly influence price trajectories. Furthermore, heightened market volatility, represented by the VIX, exerts a statistically significant negative impact on BTC returns. The findings suggest that Bitcoin has transitioned into a sophisticated value asset, underpinned by production efficiencies and an expanding institutional base. Consequently, Bitcoin represents a viable alternative to centralised financial systems, offering a potential hedge against inflation and the erosion of purchasing power. The study concludes that digital assets warrant inclusion within conservative institutional portfolios, notwithstanding the inherent speculative nature of the market.

George Lovegrove

ABSTRACT This article explores the application of demurrage money, a concept developed by Silvio Gesell, into Web3. Demurrage money, designed to discourage the hoarding of currency and prevent economic stagnation and concentrations in wealth, offers a potential remedy for the problems of traditional fiat and gold‐backed monetary systems. The article presents an overview of Web3, highlighting its core principles such as being decentralized, permissionless, community governed, and programmable. It critiques the limitations of current Web3 cryptocurrencies, particularly Bitcoin and other networks that have emerged since. By design these networks enable excessive asset storage and face sustainability challenges such as governance centralization and inadequate ecosystem funding. The article proposes that the implementation of a network coin tax, as a form of demurrage, would help to incentivize productive economic activity, decentralize coin ownership, provide reliable funding for node operators and ecosystem development and create opportunities for large‐scale public goods funding. Various monetary supply models are discussed, evaluating their compatibility with demurrage systems. The article concludes that demurrage based economic systems could lead to more resilient, equitable and sustainable Web3 ecosystems that have significant potential for making a global societal impact.

Samuele Bibi

Since World War II, the US dollar (USD) has substantially increased its prominence in international financial systems, culminating in its position as the predominant currency, facilitating approximately 90% of global foreign exchange transactions. The reliance of most nations on the USD for international trade - particularly for oil, commodities, and other goods - has cemented its critical role in global finance and geopolitics. Hence, the usage of the USD supported and forged an economic and geopolitical function for the emitting country, the United States of America. The geopolitical implications and risks related to the USD hegemonic power in trade and financial transactions have become increasingly more striking, especially in recent decades and years. The sanctions imposed on Venezuela, Iran and more recently on Russia via the US dollar-dominated SWIFT payment system highlighted the potential threat posed by the USD hegemonic power in the global monetary system. However, in the new millennium, alternative digital currencies have begun to exert influence and have implicitly and explicitly posed a threat to that hegemony. Bitcoin and other cryptocurrencies, for instance, have enabled international transactions without reliance on USD use. Additionally, the emergence of several multi-currency Central Bank Digital Currencies (CBDCs) would allow nations to conduct cross-border payments using various currencies without passing through the USD as an intermediary. Our paper explores the geopolitical implications of USD use on the international stage and examines the potential opportunities and threats posed by these new digital currencies for countries.

Aleksandr Yu. Malkin, Diana Yu. Boboshko

This study presents a comprehensive analysis of the cryptocurrency market through the lens of classical and modern economic schools, focusing on key regulatory mechanisms: staking, halving, token burning, and asset locking. The relevance of the research stems from the need to develop a theoretical framework for managing the stability and liquidity of decentralized financial systems amid high volatility and technological transformation. The hypothesis posits that integrating principles from economic schools (classical, Keynesian, monetarist, Austrian, institutional) with algorithmic cryptocurrency mechanisms can create a hybrid model of market resilience. Using an interdisciplinary approach, including mathematical modeling, regression, and correlation analysis of data on Bitcoin, Ethereum, XRP, and BNB, the study confirmed Bitcoin’s dominant role as a systemic asset through token burning and vesting. The practical implications include recommendations for optimizing regulatory mechanisms, diversifying investment portfolios, and designing stress tests to mitigate systemic risks.

José Javier Losada

No abstract is available for this record.

Klaus Jaffé

Money serves several roles: a medium of exchange to buy and sell without bartering; a unit of account to price goods consistently; a store of value to save purchasing power over time; a means to defer payment of future obligations like credit or loans. An agent based computer simulation program determine quantitatively the relative importance of these services. The main results showed that money for credit was by far the feature that achieved the largest overall production of wealth in the simulated societies. A conclusion from this study suggests that fomenting the use of internationally tradable currencies such as Bitcoin seems to be most promising pathway for international economic growth in the near future.

Arthur E. Wilmarth

This written testimony was submitted to the Financial Services Regulation Committee of the United Kingdom House of Lords, in response to that Committee’s “Call for evidence” on the “Growth and proposed regulation of stablecoins in the UK,” https://committees.parliament.uk/call-for-evidence/3845/. This testimony provides an overview of the global stablecoin market and the current leading uses of stablecoins. The testimony also describes the unacceptable dangers that uninsured nonbank stablecoins pose to financial stability, economic welfare, consumer protection, monetary policy, regulatory compliance, and law enforcement. The testimony presents the following policy recommendations: (1) Stablecoins should be regulated in the same way as bank deposits. Only regulated banks should be allowed to issue or distribute stablecoins. Stablecoins should be required to satisfy the same prudential standards and provide the same consumer safeguards – including deposit insurance – as bank deposits. 2) Stablecoins should be issued and recorded exclusively on permissioned distributed ledgers that are controlled and administered by one or more designated banks. The designated banks should have full responsibility and accountability for ensuring that their stablecoins and their distributed ledgers fulfill all legal and contractual obligations. 3) To ensure compliance with AML/BSA/KYC requirements, stablecoin holders should be prohibited from holding their stablecoins in “unhosted” private digital wallets. (4) Stablecoin reserves should be invested solely in central bank reserves or in government securities with a weighted average maturity of 20 days or less. (5) If – contrary to the foregoing recommendations – nonbanks are allowed to issue stablecoins, those issuers, crypto exchanges, other crypto trading platforms, and their affiliates and business partners should be prohibited from paying interest, rewards, or any other financial inducements to stablecoin holders for owning stablecoins or keeping their stablecoins at designated locations. The author also presented oral testimony (via Zoom) to the Committee, available at https://committees.parliament.uk/event/26299/formal-meeting-oral-evidence-session/.

Adil Maqsood

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

Leo H. Chan

No abstract is available for this record.

Petar Hrgović

No abstract is available for this record.

Augusto Blanc-Blocquel, Rodolfo Oviedo

This paper tests whether Bitcoin’s four-year cycle persists in monthlyreturn dynamics after the asset’s recent institutionalization. Weestimate harmonic Fourier regressions with 48- and 24-month componentsand allow the cycle coefficients to shift after a May 2023 structuralbreakpoint. We compare an unconditional model with a macro-conditionedspecification that includes S\&P 500 and U.S. Dollar Index returns.The unconditional results indicate a significant post-break changeand a sharp reduction in cyclical amplitude. However, after controllingfor broader market and liquidity conditions, the residual four-yearcomponent loses statistical significance. The evidence suggests thatBitcoin’s historical halving-related rhythm has weakened and thatits return dynamics are increasingly linked to global macro-financialconditions.

A. V. Fedorov

Africa's monetary and financial system, which is currently developing dynamically after a prolonged period of neocolonial dependence on transnational financial groups and international capital, is following its own unique path of development, one that differs significantly from the financial trajectories of other global regions. Sub-Saharan Africa, in particular, showcases a unique experience in the evolution of its monetary system, characterized by the world's highest growth dynamics in fintech and electronic non-bank payments. The active, extensive development of Pan-African financial groups and the trend of them displacing foreign and transnational financial corporations from the African continent are intensifying each year. Africa is one of the global leaders in the development of decentralized finance and cryptocurrency mining. At the same time, the continent remains burdened with high levels of external public debt, accumulated primarily in the post-colonial period of its history. This debt hinders the economic development of African nations and their achievement of the Sustainable Development Goals. Concurrently, the scientific and political discourse on reforming the global financial architecture is becoming increasingly acute, as the current system in its present form is incapable of effectively countering new challenges, which have further exacerbated the problems accumulated over recent decades. Africa stands to be a primary beneficiary of a reform of the global monetary and financial system, within which it must assume an adequate position commensurate with its growing international role that reflects its deserving status in geopolitical and geo-economic terms. Sub-Saharan Africa has the potential to become the trigger that accelerates the reform of the global financial architecture and to serve as a unique testing ground for corresponding pilot projects.

Antonio Martínez Raya, Alejandro Segura de la Cal, Javier Espina Hellín

Since its launch in 2009, Bitcoin has become a market disruptor due to its primary function as a virtual currency supported by blockchain technology and the high volume of economic transactions it facilitates. This article examines the key theoretical principles that have contributed to Bitcoin’s recognition as a cryptocurrency. It assesses whether Bitcoin meets the criteria for being considered a form of money and evaluates its importance as a financial asset. This analysis of Bitcoin from 2014 to 2025 reveals that it does not sufficiently fulfill all the typical functions of money, such as serving as an internationally accepted means of payment, a unit of account, a securities depository, and a standard for deferred payments. Despite its usual close correlation with stock indices in financial markets, a decentralized digital currency like this still does not meet the requirements of fundamental analysis. In practice, this leads to its exclusion as a currency, since it does not fulfill the functions of money nor fully qualify as a crypto asset, as its value is primarily based on investors’ expectations of high returns. Apart from a lack of foundation in tangible goods or services that justifies their value and dependence on new investors, the findings do not indicate conditions typical of a developed pyramidal model. Nevertheless, this does not prevent future technological innovations from responding positively to the functions of money or from offering real money services, especially those related to service innovation and the digital economy.

Du Chuan, Ria Sonawane, Cy Watsky

Stablecoins are crypto-assets designed to maintain a stable value against a reference asset, typically the U.S. Dollar. The peg to the dollar is supported by the assets that back the stablecoin. Stablecoins perform dollar-like functions in decentralized finance (DeFi) and represent a run-able liability for their issuers.

S. M. Ashraf, P. Hemanth Kumar

Abstract This research paper provides a comprehensive analysis of Bitcoin, the world’s preeminent cryptocurrency, focusing on the economic drivers of its price formation, its broader impact on the economy, and the evolving dynamics of its volatility. Drawing on high-frequency econometric modeling, time-series analysis, and network-based prediction methods, the paper synthesizes insights from leading empirical studies to elucidate the factors shaping Bitcoin’s price, including supply-demand fundamentals, investor behavior, macro-financial indicators, transaction network structure, and the influence of derivative markets. Additionally, it explores Bitcoin’s adoption in key industries, its intrinsic and extrinsic value determinants, and the implications of its volatility for financial stability. The study concludes by reflecting on the future trajectory of Bitcoin as it transitions from speculative asset to potential mainstream medium of exchange, considering regulatory, technological, and market challenges. Keywords: Bitcoin, cryptocurrency, price formation, volatility, supply-demand, GARCH, partial differential equations, transaction networks, futures markets, economic impact

Wynn Edgar

No abstract is available for this record.

Tiernan Collins

No abstract is available for this record.

Pham, Huy

Cryptocurrency has become more popular in the awareness of individuals, corporations, and financial institutions. The thesis will examine the acceptance of the cryptocurrency market by stakeholders in the economy. The thesis will also discuss the impacts of the cryptocurrency market on the global financial system by analyzing some countries’ perceptions, contributing to the evidence that the cryptocurrency market trend is growing. Published papers, cryptocurrency documents, and government reports will be the main sources. Qualitative and quantitative methods will be included in the thesis in order to increase the thesis’s points. By using the analysis and synthesis method, the thesis will provide a detailed and more comprehensive view of the cryptocurrency market. The history of currencies and forms of payment will also be discussed in order to show the opportunities of cryptocurrencies. A more realistic view of cryptocurrencies’ current trend will result, so stakeholders can take appropriate actions and approaches when participating in the market.

Imen Ben Achour, Jihed Majdoub

No abstract is available for this record.

I Kadek Mentik Yusmantara, S. Si.

No abstract is available for this record.

Christian Catalini

Stablecoins are transforming from niche crypto instruments to critical programmable infrastructure, with profound implications for global finance and business strategy. By enabling instantaneous, low-cost settlement, they bridge disparate domestic payment systems, dismantle inefficiencies in entrenched card networks and legacy rails, and unlock decentralized finance applications. This analysis delineates the core stablecoin archetypes - fully reserved variants, deposit tokens, tokenized money-market funds and algorithmic constructs - assessing their trade-offs in reserve robustness, consumer protection, regulatory compliance and long-term business viability. The paper then charts five geopolitical pathways, ranging from a lightly upgraded Bretton Woods order to fragmented multipolar or more chaotic monetary regimes, unpacking how these trajectories could propel or impede stablecoin adoption.

Ian Appel, George (Yiorgos) Allayannis

This case examines a fictional hedge fund manager's decision about whether to maintain his fund's position in bitcoin. It provides an opportunity for students to develop an investment thesis for or against bitcoin, evaluate alternative ways to gain exposure to bitcoin, and consider bitcoin's economic function (e.g., as a currency or commodity). The case can be used in an MBA elective course on fintech, capital markets, or investments. Excerpt Bitcoin: Keep “Hodling”? Whether it goes up or down in the next year, or five or 10 years, I don't know. But the one thing I'm pretty sure of is that [Bitcoin]doesn't produce anything. It's got a magic to it and people have attached magic to lots of things. —Warren Buffet, chairman and CEO, Berkshire Hathaway Inc. I think the average investor should ask himself or herself what do you have in your portfolio that has [Bitcoin's] kind of track record—number one; is very, very underpenetrated; can provide a service of insurance against financial catastrophe that no one else can provide; and can go up ten times or fifty times. The answer is: nothing. —Bill Miller, founder, chairman, CIO, Miller Value Partners In mid-September 2025, John Brown, a hedge fund manager based in Miami, was reviewing his portfolio. His focus was on the fund's position in bitcoin. Brown had initiated a small position in the cryptocurrency (crypto) at the urging of one of the fund's limited partners (LPs) four years earlier. The bet had paid off, with the price of bitcoin more than doubling over the last four years (Exhibit 1). The path to get there, however, had been brutal. . . .