The paper is dedicated to the discussion of tokenization of backed assets as a promising and potentially new solution to the long-standing and unresolved issue of growing economic inequality in modern society. Asset tokenization is considered as a simple and technologically realistic way to facilitate the financial availability of valuable investment assets (real estate, securities, gold, etc.), which is a modern and unexpected manifestation of blockchain technology, provided that tokens of real assets are recorded in decentralized information platforms. The paper successively solves three working tasks: the problem of global wealth inequality has been described, and its solution through increasing digital financial accessibility has been presented; the essence of tokenization of assets as a new phenomenon and trend in the modern digital economy has been presented; the idea of asset tokenization due to its ability to radically increase the level of accessibility of investment assets for any strata of the population owing to a unique property of divisibility of the distributed ledger token has been explained. The author uses considerable aggregated data and a review of modern foreign literature. The author concludes that asset tokenization can indeed be a new means of significantly reducing the barrier to investment for billions of people worldwide by lowering the threshold of minimum investment costs and increasing the liquidity of existing physical assets. To make this possible, regulatory compliance, regulation and storage must be addressed. Many countries and organizations have taken steps to better understand the asset tokenization and proper value. It also causes the reconfiguration of institutions and rules of operation of the market infrastructure.
Crowdfunding is a fundraising method that involves raising small amounts of money from a large number of people, typically through online platforms. It allows individuals, businesses, or organizations to present their projects, ideas, or causes to a global audience and request financial support from a crowd of potential backers. Crowdfunding has gained popularity across various industries, including technology, arts, entrepreneurship, social causes, and more. It provides a democratized approach to financing, allowing innovative and creative ideas to come to life with the support of a diverse community of backers. The current research explores the potential of blockchain technology and smart contracts to revolutionize traditional crowdfunding methodologies. Traditional crowdfunding has been plagued by issues such as lack of transparency, centralized intermediaries, slow payment processing, fraud, and limited access. In response to these challenges, blockchain solutions offer a transparent and decentralized approach, allowing contributors to track their contributions, eliminate intermediaries, automate fund disbursement, and enable cross-border transactions. Tokenization and reduced entry barriers further enhance accessibility and participation. The current research presents a conceptual model and implementation of a smart contract-based crowdfunding system using Solidity, addressing these issues and providing a foundation for future research in the field of decentralized crowdfunding. The research scope has been expanded to encompass Initial Coin Offerings (ICOs) as a means of fundraising for startups. Within this context, fungible tokens, which adhere to the ERC-20 standard, are generated using the OpenZeppelin library. These tokens are then subject to approval by the startup, granting authorization to a crowdfunding manager for the purpose of distributing tokens to contributors based on their respective contributions. The percentage of tokens made available for distribution can be customized to suit the specific needs and preferences of the startup.
İslam ülkelerinin ikinci dünya savaşı sonrasında bağımsızlıklarını kazanmaları ile İslami finansın 1970’li yıllardan itibaren çağdaş anlamda başladığı gelişiminde politik ekonomi önemli bir rol oynamıştır. İslami finans dayandığı iktisadi temelleri üzerinde yükselirken hem geleneksel finansın araçlarından hem de gelişmekte olan dijital teknolojilerden yararlanmıştır. Özellikle 2008 küresel finansal kriz sonrası yaygınlaşan finansal teknolojiler tüm finans sektörünü dönüşüme uğratmaya başlamıştır. İslami finans sektörü ve İslami finansın ekonomi politiği gelişmekte olan finansal teknolojilerden yararlanarak bu alana yeni bir bakış açısı kazandırmıştır. Geleneksel finansal teknolojilere ek olarak blokzinciri ekonomisi üzerinde yükselen merkeziyetsiz finansın ortaya çıkışı tüm dünyaya sistemik bir öneri getirirken İslami finans için de yeni yollar açmıştır. Bu çalışmada İslami finansın ekonomi politiği çerçevesinde merkeziyetsiz finans uygulamaları, özellikle merkeziyetsiz otonom organizasyonlar işlenmektedir. İslami finansın, finansal teknolojilerin sunduğu imkânlar ile daha iyi bir hizmet alternatifi sunacağı düşünülmektedir. Çalışma, İslami finans ve merkeziyetsiz finans kesişiminde ortaya çıkan uygulama alanının “Merkeziyetsiz İslami Finans” kavramsallaştırmasıyla ele alınabileceğini önermektedir. Bu bağlamda İslam ülkelerinin Merkeziyetsiz İslami Finansı politik ekonomi çerçevesinde değerlendirebileceği aktarılmaktadır. İslam ülkelerinin girişimci devlet anlayışıyla İslami finansın ekonomi politiğinde merkeziyetsiz finans uygulamalarının gelişimine öncülük edebileceği savunulmaktadır. Bu yaklaşım dijitalleşmenin yükselişi karşısında İslami finansın daha katılımcı anlayışla birey, devlet ve toplum nezdinde etkin bir şekilde yaygınlaşmasını ve uygulanmasını mümkün kılabilecektir. Merkeziyetsiz İslami Finans, iktisadi temelleri, dijital olanakları ve dağıtık yönetişim anlayışıyla yeni bir tasavvur vaat etmektedir.
Blockchain and its applications have been increasingly familiar to market participants, investors, and developers in the last 5 years. Technology developments and increasing usage of smart devices create a booming environment for blockchain applications, including Decentralized Finance (DeFi) applications. DeFi applications are designed and developed from blockchain technology and decentralized protocols, having the potentials to replace the traditional financial system and applications such as deposits, lending, exchange and derivatives. In this study, we provide detailed comparisions between traditional centralized finance and decentralized finance, which highlight the anonymity, transparency, universal assess and interoperable and composable of DeFi protocols. Moreover, we examine popular DeFi applications in lending, exchange and derivatives, that are expectedly promote financial inclusion and improve social efficiency with the public, security, and anonymity in financial services. Consequently, we discuass the benefits, risks and challenges with which these DeFi applications posing to the authorities and provide some policy implications.
Abstract Over the last decade, the green shoots of a new economic order have emerged as decentralized technologies challenge traditional financial systems. Decentralized finance (DeFi) holds the potential to transform international business (IB) by offering accessible financial services across borders, disrupting traditional intermediaries, and promoting financial inclusion. While traditional fintech has challenged banks, DeFi operates outside legacy systems, leveraging blockchain technology and smart contracting to introduce a new range of products and services that provide first-movers with an upper hand to both expand their business across the globe as well realize cost savings on existing business. Despite offering advantages like efficiency, transparency, and security, DeFi faces regulatory uncertainties and scalability, adoption, and stability concerns. Our study explores how DeFi can seamlessly integrate into the IB space while addressing these challenges. In addition to offering insights for investors, multinational firms, and regulators, we also lay the groundwork for future IB research in the fintech domain. As the DeFi innovation unfolds, understanding and harnessing its potential can empower stakeholders to engage responsibly and effectively in this transformative landscape.
Purpose The purpose of this study is to discuss the role of central bank digital currency (CBDC), Fintech and cryptocurrency for financial inclusion and financial stability. Design/methodology/approach This study used critical discourse analysis to identify the benefits and risks of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. Findings Fintech, CBDC and cryptocurrency can increase financial inclusion by providing an alternative channel through which unbanked adults can access formal financial services. CBDC and Fintech services have the potential to preserve financial stability, while cryptocurrency presents financial stability risks that can be mitigated through effective regulation. This paper also identified some problems of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. This paper offered some insight about the future of financial inclusion and the future of financial stability. Practical implications Although CBDC, Fintech or cryptocurrency can extend financial services to unbanked adults and offer cost-efficient advantages, there are risk considerations that need to be taken into account when using CBDC, Fintech and cryptocurrency to increase financial inclusion and to preserve financial stability. Originality/value The literature has not identified the combined role of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability. To the best of the author’s knowledge, this paper is the first paper to assess the combined role of CBDC, Fintech and cryptocurrency for financial inclusion and financial stability.
Better financing, financial management, and information intermediary services are the main objectives of Internet finance. Several aspects of the internet, including payments, cloud computing, social networking, and search engines, are the foundation of this new financial paradigm. It is a newly created financial service with qualities taken from conventional financial services, such as more operational convenience, greater involvement, better collaboration, and increased transparency. Internet finance links the financial industry to the fundamental principles of the Internet, such as decentralization, openness, equality, competitiveness, and competition. The primary distinction between Internet finance and traditional finance lies not only in the many channels each financial organization has employed in its development, but also in the participants' thorough knowledge of the underlying principles of internet cooperation and expansion.
Sakib Bin Amin, Farhad Taghizadeh–Hesary, Juhi Jannat, Mahatab Kabir Khandaker · 5 authors
This chapter aims to critically discuss the essence of institutional and regulatory requirements given the current status of fintech development in Bangladesh. The chapter indicates that the fintech development in Bangladesh has been mostly skewed toward mobile financial services (MFS). The development of other advanced fintech methods, however, such as peer-to-peer (P2P) lending, distributed ledger technology (DLT), crowdfunding, cloud computing, credit rating firms for start-ups or other innovative firms, partner financing, and blockchains, are not satisfactory. The chapter reveals that such an outcome persists because of the prevailing regulatory and institutional drawbacks. Hence, by explaining the importance of institutional and regulatory requirements, the chapter proposes a framework for the fintech market development in Bangladesh, given the development agendas of vision 2041 and beyond. The chapter also proposes some key policy suggestions to strengthen the fintech market dynamics in Bangladesh for achieving financial sustainability.
The Middle East and North Africa (MENA) region is rather underbanked and heavily reliant on foreign migrant workers when compared to other regions in the world. With the rapid expansion in digitalization, online payment solutions, and mobile phone penetration, startups, particularly fintech, are playing a large role in supporting the financial inclusion of migrants and, potentially, refugees into the formal financial system. This chapter will look at the main trends in financial inclusion in the MENA region and how fintechs play a crucial role in the remittance market. It will also look at how governments, regulators, financial institutions, and investors provide policy and financial support to scale these initiatives. Fintechs largely depend on particular technologies that provide low-cost, scalable solutions, such as in the MENA region cover remittance services, as cross-border financial transactions are among the largest requirements for migrants who need to send money back to their families and countries of origin. As this is an emerging area, several case studies of fintechs in the MENA region, working on technologies such as e-remittances, digital identification solutions, blackchain and distributed ledgers, insuretech, and mobile money and payment solutions to provide financial inclusion to migrant workers will be covered.
Decentralized Finance, or DeFi, is a financial ecosystem built on blockchain technology, aiming to recreate traditional financial services without the need for central authorities like banks or intermediaries. It is a growing ecosystem of financial applications and services built on blockchain technology. Unlike traditional finance, which relies on centralized institutions like banks, DeFi leverages peer-to-peer (P2P) networks to facilitate financial transactions. Traditional financial systems often leave individuals and communities, particularly those in developing economies or marginalized groups, excluded due to limited access, high transaction costs, and stringent regulations. Decentralized Finance (DeFi) emerges as a potential solution, leveraging blockchain technology to offer an alternative financial ecosystem built on transparency, disintermediation, and accessibility. This paper investigates the potential of DeFi in fostering financial inclusion and economic empowerment. DeFi has gained traction in India, with a growing interest in blockchain-based financial services. However, regulatory uncertainties have led to some cautiousness. Indian regulators are exploring frameworks to address potential risks while encouraging innovation in the DeFi space. As the regulatory landscape evolves, the adoption and development of DeFi in India are likely to be influenced by government policies and industry collaborations
Purpose This paper presents an overview of embedded finance. It identifies the applications, use case examples, benefits and challenges of embedded finance. The paper also analyzes global interest in embedded finance and compares it with interest in related finance concepts such as open finance, open banking, decentralized finance, financial innovation, Fintech and digital finance. Design/methodology/approach Granger causality test and two-stage least square regression were used to assess interest over time in embedded finance. Findings The empirical result show that interest in embedded finance increased significantly during the COVID-19 pandemic. The United States, the United Kingdom and India witnessed the highest interest in embedded finance compared to other countries. There is bi-directional Granger causality between interest in information about embedded finance and interest in information about financial innovation. There is uni-directional Granger causality between interest in information about embedded finance and interest in information about digital finance and open finance. The findings also reveal that interest in decentralized finance and open finance are significant determinants of interest in embedded finance. On the other hand, interest in embedded finance is a significant determinant of interest in digital finance, decentralized finance, Fintech and open banking. Also, interest in embedded finance is significantly correlated with interest in digital finance, decentralized finance, open banking and Fintech. Originality/value Presently, there is little academic interest in embedded finance despite the fact that embedded finance is part of the on-going digital finance revolution. This paper fills this gap in the literature by assessing the benefits, use case, challenges of embedded finance.
Crowdfunding is starting to compete with the traditional mode of funding and has allowed startups to raise funds without too much red tape and bureaucracy. In this work, we propose a participatory platform for the social and solidarity economy, based on blockchain technology, smart contracts and a mode of financing inspired by Islamic financing. This mode of financing is based on the prohibition of interest, uncertainty and speculation and is based mainly on the principle of active partnership: "Musharaka". Donations are also considered and managed as financial assets. It is based on the direct ownership of tangible assets and investment operations through the principle of sharing profits or losses which promotes partnership and a more equitable sharing. The introduction of blockchain in crowdfunding makes this type of funding more reliable, transparent, decentralized, profitable and convenient. The crowdfunding platform is proposed for a project that consists of equitable water distribution and irrigation compatible with ecosystems in the Haouz region of Morocco.
Abstract Individuals in low-income countries often contribute significantly to financing local public goods through informal taxation. However, there is limited understanding of how informal revenue generation relates to formal tax and governing institutions. We explore the relationship between informal revenue generation, public finance, and the state in the Gedo region in south-central Somalia, relying on original data from surveys with 2,300 households and 117 community leaders. Our evidence shows that informal revenue generation by non-armed actors in Gedo is prevalent, with informal payments deeply embedded within clan-based and Islamic institutions and rooted in a long history of decentralized political authority and self-reliance in the region. We argue that in such a context, rather than explaining how or why things ‘work’ outside of the state, it may be more relevant and valuable to consider decentralized non-state public authority as the default referent, with a need only to explain the puzzle of pockets of state effectiveness. Governance largely operates outside the state, with citizens playing a pivotal role in directly financing local governance institutions and public goods provision. These findings have important implications for our understanding of statehood and public finance in contexts of weak formal institutions.
In this paper, we sought to assess the factors explaining the repayment of loans by borrowers in SFDs in Togo using a Logit model. A regression analysis of data collected on a sample of 157 loan files shows that older borrowers and those more distant from the institution have a higher credit repayment score, while gender and the amount of credit received by the borrower negatively influence the credit repayment rate. Even if the credit repayment score does not depend on the activity that the borrower has undertaken or wants to undertake, it would be desirable for the SFDs to finance more commercial activities because they favor a rapid turnover of capital.
India is significantly diverse in culture and how it promotes business transactions. Though we are very acquainted with cash, cards, and online mode of payment, the Indian rural economy still believes in the barter system. At this juncture, India is evolving as a tech power house, and its economy is thriving to embrace cryptocurrency as a medium of exchange. After the Indian finance minister declared the same last February that India is working towards building its legal tender called Central Bank-backed Digital Currency (CBDC), this paper is making an impact in explaining our strengths, weakness, market readiness, and necessity to adopt a digital rupee when India's economy is highly regarded as a cashoriented economy. Is our country ready to accept the new technological shift in smart banking in the form of a digital rupee? The paper highlights the socioeconomic and technical challenges our planners need to understand before changing the Central banks' monetary policies. The deployment of fifth-generation (5G) cellular network technology has sparked renewed interest in the potential of blockchain to automate different cellular network use cases. 5G is projected to open up new market prospects for small and large businesses. The article highlights the unique instrument of the digital rupee to enhance peer-to-peer transactions with the evolution of 5G mobile technology.
Financial inclusion is seen as a dynamic tool for achieving multifaceted microeconomic stability, (and) sustainable economic growth, job creation, poverty reduction, and income equality for both developed and developing nations. The needy segments of the population must be provided with financial services to accomplish this inclusion. Still, the traditional financial market is unavailable due to its lack of collateral and shallow income. Thus, they go to local moneylenders, also known as "loan sharks," who charge exorbitant interest rates. Introduction to microfinance came as a new and refreshing light to these needy segments of the population as it provides small valued loans (micro-credit) to support their micro-scale businesses and engage in productive activities. As emerging technology started to be incorporated into every aspect of society, thus microfinance also needed to be incorporated into the technology. An application is required to protect data integrity and smoothly influence the microfinance sector. As the databases are vulnerable to data manipulation, this can affect the transaction history of the loan. Blockchain technology can be used to solve this problem, as data in the Blockchain is stored immutably. So, we designed a microfinance application that uses blockchain technology with decentralised KYC architecture to reduce multiple KYC verification and easy access to micro-credit.
This chapter examines some emerging technologies including distributed ledger technology, cryptocurrency, central bank digital currencies (CBDCs), data analytics, robo-advising, application programme interface, peer-to-peer lending, artificial intelligence and digital identity. The chapter opens with a description of the background of the state of the financial technology (fintech) industry in Nigeria. Thereafter, the selected technology is discussed with a focus on the Nigerian context. The aim is to establish whether these technologies offer solutions that ease the burden of financial exclusion. In reviewing each of these trends, the description, benefits, potential for financial inclusion as well as any likely detriment to consumers is highlighted.
Objective: Recently, there has been an increase in the use of cryptocurrency, decentralised finance (DeFi) applications and DeFi services in several countries. These innovations facilitate the delivery of financial services using smart contracts. DeFi encompasses all financial services that are built on public blockchains, based on open protocols and removes intermediaries from the financial intermediation process. There is significant cryptocurrency activity in Africa while DeFi developments are relatively new and unpopular in the African continent. This chapter introduces DeFi in Africa. It presents some statistics and data on DeFi in Africa. Thereafter, the potential benefits, challenges and regulatory issues associated with DeFi in Africa are presented.Method: This study used literature reviews and external data sources to show the benefits and advantages of DeFi .Findings: The findings show that there is low interest in DeFi in Africa. Some benefits of DeFi to African countries include increased liquidity for many small- and medium-scale enterprises (SMEs), new opportunities to raise additional capital to fund capital-intensive activities, usher in an era of smart contracts that are negotiated bilaterally without needing an intermediary, encourage peer-to-peer trade between economic agents in several African countries, enhance the efficiency of the Pan-African Payment Settlement System and encourage more trade between individuals and corporations under the African Continental Free Trade Agreement, among others.Originality: This is the first chapter to examine DeFi in Africa.
Abstract Decentralized finance, including cryptocurrency and other blockchain-based applications, promises participants benefits such as financial freedom, security, privacy, and wealth accumulation. More recently, it has also offered the promise of participation, lowering financial barriers, and empowerment—especially to women, the poor, and those residing in the Global South. I argue that the rise of decentralized finance as an alternative development platform is explicitly gendered and calls for feminist analysis. I discuss how cryptocurrency-based approaches to development rest on foundations that are gendered, interacting with hierarchies of race/ethnicity and class. I also explore how they are part of a lineage of neoliberalism, leveraging neoliberal beliefs about entrepreneurialism, financial inclusion, and gender roles. The discussion further introduces the concept of neolibertarianism as an extension of neoliberal logics that advocates for bypassing states entirely in favor of private actors. The current analysis compares this new model of decentralized finance to similarly problematic development trends and assesses how it has—as of yet—failed to deliver on the promises of participation, lowering financial barriers, and empowerment. This analysis concludes with a call to action for feminist and critical scholars, encouraging further work on the topic.