Type of the article: Research ArticleAbstractThe rise of decentralized finance (DeFi) presents new opportunities for accessing modern financial services. Despite their transformative architecture, most DeFi applications are currently unregulated, which exposes market participants to unforeseen risks. Therefore, understanding the level of connectedness between DeFi and traditional finance (TradFi) is crucial, particularly in emerging Asian markets where the level of cryptocurrency acceptance is high. Applying the time-varying parameter vector autoregressive model, this study examines the return connectedness between leading DeFi assets and traditional financial sectors in Indonesia, India, and Vietnam â the top three countries in Asia for cryptocurrency adoption. By analyzing TradFi at the industry level, this study captures sector-specific spillover dynamics that are essential to the monitoring of systemwide risk. The empirical results reveal low, time-varying return spillovers between DeFi and traditional financial sectors in the selected emerging Asian markets. The emerging financial sectors exhibit stronger linkages with broader traditional market indicators than with DeFi, in which assets interact primarily with each other. Emerging financial sectors and gold are the recipients of return spillovers, and DeFi assets act as the return transmitters. The current low degree of integration between DeFi and TradFi offers policymakers a window of opportunity to develop a robust financial regulatory framework that addresses issues of market stability and consumer protection while promoting the advancement of financial innovation.AcknowledgmentsWe thank the editors and anonymous reviewers for their valuable and constructive feedback, which has contributed significantly to improving the quality of this manuscript.
This study explores how national institutional environments shape entrepreneurial activity in the context of decentralized finance. Focusing on Initial Coin Offerings (ICOs), we use fuzzy-set Qualitative Comparative Analysis (fsQCA) on data from 2,709 ICOs across 42 countries to identify institutional configurations associated with high and low ICO activity. Drawing on institutional theory and heuristic-driven decision-making, we find that entrepreneurs and investors navigate uncertainty through diverse, context-specific institutional combinations. The findings contribute to entrepreneurship research by uncovering multiple pathways through which macro-level regulatory, cultural, financial, and technological conditions enable or constrain token-based fundraising across national ecosystems.
This study investigates Granger-causality relationships between crypto-assets (Bitcoin and Ethereum) and traditional financial assets (stock indices and exchange rates) in BRICS-T countries over the 2016â2024 period. The findings highlight significant interlinkages: bidirectional causality exists between Bitcoin and Russia's stock market, and between Ethereum and both Brazil's stock market and the USD/INR exchange rate. Unidirectional causality is observed from Bitcoin to the stock markets of Brazil, India, and China, while the USD/TRY exchange rate influences Bitcoin. Similarly, Ethereum affects the stock markets of Russia, India, and South Africa, while the USD/TRY exchange rate also Granger-causes Ethereum. These results indicate a growing synchronization between crypto-assets and conventional financial markets. The presence of both unidirectional and bidirectional causalities emphasizes the increasing integration of global financial systems and highlights the importance for investors to consider cross-market interactions when making decisions. Crypto-assets are no longer isolated but are embedded in broader financial dynamics.
<div> Blockchain technology is making a huge difference in the global technology system where it proves better security than traditional system, gaining trust among users for transparency and solving many problems which the current economy is facing. Transaction being done via decentralized network has gasps attractions of many industries including shipping, healthcare and supply chain with less time and accuracy. The decentralized Finance system is solving problems including traditional banking accessibility in remote regions where banks are not available for transactions, Decentralized Finance (DeFi) which reduces cost of infrastructure and mankind by providing direct access to their asset and trade via internet. Although there are governments policies and regulations that are still not clear amongst many countries, even technology is for good but not able to use it due to limited knowledge and guidance. This paper explores how the global economy can be put in such a situation where new technology can not only help government bodies to tackle traditional finance challenges but also mitigate risks, tackle cybercrimes and increase transparency so that everyone across globe can feel secure about innovation in blockchain. This paper will also do analysis of how big data is making a difference in global economy and how government policies are affecting big data and blockchain technology. </div>
Aiming to connect key financial infrastructures in ASEAN+3 markets, this publication examines the uses of distributed ledger technology (DLT) and blockchain (BC) for settling cross-border delivery-versus-payment (DVP) securities transactions.
Due to widespread decentralization of spending responsibilities, increasing revenue power and borrowing capacity of sub-national governments, sub-national borrowing has become an increasingly important source of sub-national finance. While there are arguments for and against giving sub-national authorities room for raising their own financial resources, appropriate sub-national borrowing regulatory framework can reduce chances of defaults and fiscal crises. This dissertation investigates the effectiveness of sub-national borrowing regulations in maintaining fiscal sustainability. More precisely, it tests the hypothesis that is sub-national borrowing is restricted to financing capital investments (the âgolden ruleâ), and if the sub-national governments are provided with some measure of revenue autonomy, then the sub-national borrowing should not endanger fiscal sustainability. Based on the sub-national government panel data for 57 countries between 1990 and 2008 and applying the system GMM estimator and the survival analysis, this dissertation provides support for this hypothesis. The results suggest that the âgolden ruleâ is effective in maintaining fiscal sustainability at both general and sub-national government level. Sub-national tax autonomy, however, seems to have positive but very small marginal effect on fiscal sustainability. The obtained results also emphasize the risk of the soft budget constraint and the moral hazard. Significant central government financing may give encouraging signs to the sub-national governments to over-borrow and to expect being bailed out by the central government. The results obtained in this dissertation imply following policy recommendations. First, sub-national government borrowing does not have to endanger fiscal sustainability if the borrowing regulation framework is well designed and according to specific country circumstances. Second, reducing fiscal dependence on central government financing reduces the risk of moral hazard and improves the effectiveness of borrowing control in maintaining fiscal balance at the sustainable level.
Abstract This chapter describes how the structure and governance of international trade financeâthe oldest domain of international financeâevolved from the Middle Ages until today. Trade finance products initially consisted of idiosyncratic assets issued by local merchants and bankers. The financing of international trade then became increasingly centralized and credit instruments were standardized through the diffusion of the local standards of consecutive leading trading centers (Antwerp, Amsterdam, London). This process of market centralization/product standardization culminated in the nineteenth century when London became the global center for international trade finance and the sterling bill of exchange emerged as the most widely used trade finance instrument. The structure of the trade finance market then evolved considerably following World War I and disintegrated during the interwar deglobalization and Bretton Woods period. The reconstruction of global trade finance in the post-1970 period gave way to the decentralized market structure that prevails nowadays.
While trade finance has been recognized as a key element in international trade, there is a persistent gap between supply and demand. On the other hand, distributed ledger technology (DLT) has given birth to the decentralised finance (DeFi) phenomenon, promising to revolutionize banking and the whole financial sector. This paper enquires whether a DeFi-based business model could address the trade finance gap problematic. To this end, it presents a sketch of a DeFi trade finance business model, showing how it could address the reasons behind the trade finance gap, while at the same time developing a broader meaning of the DeFi concept itself
Blockchain is a peer-to-peer (P2P) technology that records and verifies transactions in a decentralised, cryptography-secure manner. Blockchain applications can globally manage records of any sort, such as import-export declarations, invoices, bills of lading (BLs) and certificates of origin (COs). It is a promising technology for several areas, including international trade. This paper presents blockchain, comments on blockchain platforms such as Ethereum, gives examples of private sector initiatives, shares an idea for a CO blockchain application, and discusses regulatory issues. In doing so, the paper aims to attract attention for blockchain in international trade.
In highly decentralized countries the subnational dimension of economic developments acquires particular relevance, given the existence of potential spillover effects across jurisdictions or the existence of asymmetric impacts of national-wide macroeconomic shocks. At the same time, though, the analysis of sub-national macroeconomic and public finance short-term developments tend to be restricted in many countries due to data limitations. Against this backdrop, the aim of this paper is to provide an overview of the available data for monitoring macroeconomic and public finance developments at the regional level in Spain, and to present some examples of its practical use in real time. After a thoroughly review of the publicly available information, we identify two key informational gaps in this area of conjunctural analysis, namely: (i) the lack of homogeneous and official quarterly measures of aggregate regional economic activity (in particular, real GDP), and (ii) the limited sample size of time series pertaining to government budgetary developments at the regional level.
This study analyzes which types of firm-level shocks were associated with the centralization of strategic decision-making during the recession of 2008-09. We use a unique survey dataset of more than 14000 manufacturing firms from seven European countries which includes direct information on whether the firms centralized or decentralized their strategic decision-making process. Motivated by theoretical approaches claiming that organizations under considerable stress are more likely to centralize, we use multinomial logit models to test whether firms facing a larger fall in turnover, employment, investment or having to postpone their innovations were more likely to change their decision-making process. We find evidence that employment change and postponing innovations are indeed associated with centralization even when we control for ownership, group structure, financing, management, and strategy.
In its first decade, the International Competition Network has prospered, contributed to the development of widely accepted international policy norms, and come to exemplify the form of voluntary multinational collaboration that commentators have identified as a promising way to facilitate international ordering amid the global decentralization and diversification of economic regulations. This article takes stock of ICNâs achievements, considers why it has succeeded in many of its aims, and asks a number of questions regarding what comes next. It seeks to inform the ICNâs future by offering a way to think of its institutional characteristics to assess its relative advantages.The ICNâs paramount goal is to facilitate convergence - the broad acceptance of standards concerning the substantive doctrine and analytical methods of competition law, the procedures for applying substantive commands, and the methods for administering a competition agency - on superior approaches concerning the substance, procedure, and administration of competition law with the expectation that if competition systems around the world opt in to superior techniques, they will achieve greater progress toward dismantling competitive restraints. The article begins by examining the convergence methods, specifically the four elements of ICNâs convergence strategy. It then discusses the context of the ICN within the major international competition networks that have played important roles in the development of international competition policy standards - OECD, UNCTAD, and the WTO. Finally, it looks at the ICCâs interaction with other multinational networks and considers how much the ICNâs convergence-related initiatives will reduce conflicts among jurisdictions with respect to the treatment of specific matters and whether ICN inspired convergence will suffice to eliminate transnational conflicts.The authors see three major focal points for the ICN in the coming decade. The first is to build on its past successes and continue to pursue the identification and adoption of best practices with respect to substantive standards, procedures and the administration of competitive agencies. The second is for future ICN efforts to identify and make use of complementarities with the OECD and UNCTAD to provide a basis for the networks to identify areas in which collaboration will improve their collective effectiveness. The third is to examine and refine the ICNâs operational framework and determine whether its structure and operational forms are adequate to supports its current and future programs. Finally, the authors see major and administrative challenges ahead with problems of resources, financing, and management that must be resolved for the ICC to have a successful second decade.