Blockchain Papers

Sitara Karim, Mustafa Raza Rabbani, Abu Bashar, Ahmed Imran Hunjra

No abstract is available for this record.

RAKSHIT MADAN BAGDE

No abstract is available for this record.

Emily Lee

This article examines banks’ de-risking practices inside Hong Kong's Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime, a problem that has created considerable tension between the demands of AML/CFT prevention and those of financial inclusion. It unravels the public policy tensions stemming from a multitude of financial reform causes, namely the facilitation of AML/CFT regulatory compliance, the promotion of financial technology (FinTech) innovation and an ultimate expansion in financial inclusion. The article argues that tiered account services are an important first step towards financial inclusion, culminating in the introduction of simple bank accounts by some banks to mitigate the effect of de-risking. While proposed solutions such as the know-your-client utility system and central data repository may contribute to a digital financial inclusion framework, they are not tailored to solve a specific problem (de-risking). The article therefore proposes and evaluates whether FinTech and blockchain-based smart contracts qualify as alternative solutions to de-risking. The article aims to address those policy tensions and contribute to the regulatory policy formulation and the rule-making for financial law and regulation intended to facilitate financial inclusion.

Olaniyi Evans, Oluwasola Oni

No abstract is available for this record.

KADAJJI SHIVAPPA

Decentralized Finance, commonly known as DeFi, represents a financial system constructed on blockchain technology, with the goal of replicating conventional financial services without relying on central authorities such as banks or intermediaries. It is an expanding network of financial applications and services founded on blockchain technology. In contrast to traditional finance, which depends on centralized institutions like banks, DeFi utilizes peer-to-peer (P2P) networks to enable financial transactions. Conventional financial systems often marginalize individuals and communities, particularly in developing nations or underserved groups, due to restricted access, elevated transaction fees, and strict regulations. Decentralized Finance (DeFi) appears as a promising alternative, harnessing blockchain technology to create a financial ecosystem characterized by transparency, the removal of intermediaries, and enhanced accessibility. This paper examines the potential of DeFi to promote financial inclusion and empower economies. DeFi has seen increasing popularity in India, with a rising enthusiasm for blockchain-based financial services. Nevertheless, regulatory ambiguities have resulted in a degree of caution. Indian regulators are assessing frameworks to mitigate potential risks while fostering innovation within the DeFi sector. As the regulatory environment continues to change, the growth and acceptance of DeFi in India are expected to be shaped by governmental policies and partnerships within the industry.

Jatin Manav Mutharasu, Utshav Pandey, B. Rethick, Bhavika Kulkarni · 5 authors

No abstract is available for this record.

Peterson K Ozili

This paper presents a concise review of the existing digital finance research in the literature, and highlight some of the developments in digital finance around the world. The paper reached several conclusions. Firstly, it showed that digital finance has become an important part of modern finance and the major application of digital finance can be found in Fintech, embedded finance, open banking and decentralized finance, central bank digital currencies, among others. Secondly, it identified some international determinants of digital finance which includes the need for efficiency in financial services delivery, the need to achieve the United Nations sustainable development goals using existing digital technologies, the need to increase financial inclusion through digital financial inclusion and the need for efficient payments and payment settlement finality. The paper also finds that digital finance research is growing fast, and recent studies have investigated contemporary issues in digital finance that are relevant for policy and practice. Regarding the digital finance developments around the world, the paper shows that the Fintech and mobile money industries are the largest beneficiary of investments in digital finance with the total number of users of mobile money services surpassing 1 billion globally. Also, the paper predicts that the future of digital finance is to create a digital environment that permits the offering of all kinds of financial product and services that can be customized and personalized to meet the unique needs of all users on a single digital platform and without requiring any form of human assistance or intermediary. The paper then suggest some areas for future research which include the need for more research on how regulators can keep pace with emerging digital finance transformation, the need for more research on user information security and compliance, the need for more research on how to deal with bias caused by bad data, the need for more research on how to deal with algorithmic bias, and the need for more research on how to combine a risk-conscious culture with a higher risk appetite for digital finance transformation.

Franklin Allen, Xian Gu, Julapa Jagtiani

Fintech and decentralized finance have penetrated all areas of the financial system and have improved financial inclusion in the last decade. In this paper, we review the recent literature on fintech, cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). There are important implications from the rise of fintech and the introduction of stablecoins and CBDCs in recent years. We provide an overview of China's experience in fintech, focusing on payments, digital banking, fintech lending, and the recent progress on its CBDC pilots (e-CNY). We also discuss important considerations in designing effective cryptocurrency regulations. Cryptocurrency regulations could promote growth of innovations through enhanced public confidence in this market. The e-CNY could become mainstream in the global market through effective regulations, which provide incentives and protection to market participants. A key factor to success for digital currencies has been their widespread adoption. If the Chinese e-CNY were to become a mainstream currency, the introduction of CBDC could potentially offer solutions to existing problems inherent in traditional financial systems.

Gencay Tepe, Umut Burak Geyikçi, Fatih Mehmet Sancak

The financial-technology industry has recently attracted the attention of many sectors. The financial-technology industry designs new and unusual technological financial services in many areas. It combines technology with finance and provides an alternative to the traditional financial system. In the scope of this study, 636 publications were obtained from Scopus. Various tools, such as Microsoft Excel for frequency analysis, and VOSviewer for data visualization, were used. The open-source codes used for bibliometric analysis through the R Studio program were developed by the authors and used for citation-metrics analysis. The main aim of this study was to find out the most influential studies and authors and to reveal the distributions and impacts of publications in the FinTech area between 2015 and 2021 from the Scopus database. The results indicate that the most influential journal is Sustainability Switzerland, and the most cited author is Gomber et al. Additionally, Rabbani has the most publications, while China has emerged as the most productive country. On the other hand, this study found that FinTech research clustered in four areas. These areas are computer science, business management, economics, and social sciences. This FinTech study examines financial services, financial access, and financial technology, where FinTech is at the center. It also focuses on cryptocurrency, bitcoin, and smart contracts where the blockchain is at the center. The results reveal a systematic map of existing studies. Further, the study plays a guiding role in future research.

Viren Patil, Vasvi Gupta, Rohini Sarode

People’s data is valuable and sensitive, and blockchain can significantly change how it is seen. All transactions are time- and date-stamped and are logged irreversibly. Smart contracts can even automate transactions, boosting your productivity and speeding up the process even further. After pre-specified conditions are met, the transaction or process moves on to the next stage. Smart contracts eliminate the need for human intervention and the reliance on third parties to verify that contract requirements have been satisfied. The issue of transparency and security is very paramount in any organization, especially in organizations providing crowdfunding platforms, therefore the intention to provide a reliable, secured, transparent and decentralized solution is achieved by developing a blockchain-based crowdfunding web application. This crowdfunding application is not just like any other application which just allows people to invest their money, but this platform also gives an assurance to the backers that returns will be guaranteed. The application will also provide transparency between the backers and the start-ups so that the backers can stay updated on the progress of the project work of the respective start-ups that they invested their money in. Money will be refunded to the backers in case the project is aborted in between.This will be a multi-user application with three different types of users: Admin, Backers, and Start-up. Admin can approve start-ups for listing. Start-ups can view the status of approval of their projects and funds raised in real-time. Backers can view the progress of the projects that they are funding as well as the general information about other projects listed on the application.

Adeel Nasir, Kamran Shaukat, Kanwal Iqbal Khan, Ibrahim A. Hameed · 6 authors

The contemporary innovations in financial technology (fintech) serve society with an environmentally friendly atmosphere. Fintech covers an enormous range of activities from data security to financial service deliverables that enable the companies to automate their existing business structure and introduce innovative products and services. Therefore, there is an increasing demand for scholars and professionals to identify the future trends and directions of the topic. This is why the present study conducted a bibliometric analysis in social, environmental, and computer sciences fields to analyse the implementation of environment-friendly computer applications to benefit societal growth and well-being. We have used the ‘bibliometrix 3.0’ package of the r-program to analyse the core aspects of fintech systematically. The study suggests that ‘ACM International Conference Proceedings’ is the core source of published fintech literature. China leads in both multiple and single country production of fintech publications. Bina Nusantara University is the most relevant affiliation. Arner and Buckley provide impactful fintech literature. In the conceptual framework, we analyse relationships between different topics of fintech and address dynamic research streams and themes. These research streams and themes highlight the future directions and core topics of fintech. The study deploys a co-occurrence network to differentiate the entire fintech literature into three research streams. These research streams are related to ‘cryptocurrencies, smart contracts, financial technology’, ‘financial industry stability, service, innovation, regulatory technology (regtech)’, and ‘machine learning and deep learning innovations’. The study deploys a thematic map to identify basic, emerging, dropping, isolated, and motor themes based on centrality and density. These various themes and streams are designed to lead the researchers, academicians, policymakers, and practitioners to narrow, distinctive, and significant topics.

Andrei-Dragoş Popescu

For a very long period of time, financial inclusion researchers have been addressing the barriers that prevent unprivileged people from accessing and using financial services. Financial exclusion is an underlying social problem that dates from the creation of the first financial system. Without the access to the banking and financial infrastructures, the unbanked are perpetuating a vicious cycle of poverty. Blockchain is leading this transformation of allowing unbanked and underbanked people to have access and interact with the finance industry. The promise of a digital economy is starting to take shape, as financial technology (FinTech) companies are evolving the concept of democratization of access. Decentralized finance (DeFi) is expanding the possibilities of financial technology by creating an ecosystem based on transparency, accessibility, and efficiency. We are witnessing a paradigm shift for most of the financial services which are remodeling the accessibility and usability of these services, addressing the excluded and underserved population.

Luke Taylor

No abstract is available for this record.

Prof. Kapil Hande, Gitesh Sawarkar, Pratik Kapse, Raunak Modak · 5 authors

Crowdfunding is a popular method for raising funds for various projects, where a large number of individuals contribute a small amount of money to finance a particular project. It provides an opportunity for entrepreneurs, startups, and artists to seek financial support from the general public, rather than relying on traditional funding sources such as venture capitalists, banks, and angel investors. This project aims to create a decentralized crowdfunding platform using Ethereum blockchain technology. The platform allows creators to post projects with funding goals and deadlines, and investors can contribute funds to these projects. Smart contracts are used to manage the crowdfunding process, ensuring that funds are released only when milestones are met, and that investors have a say in the progress of the project. The platform is designed to be transparent, secure, and accessible to anyone with an internet connection. By using blockchain technology, the platform eliminates the need for intermediaries, reduces transaction fees, and enables global participation. This project demonstrates the potential of blockchain technology in transforming traditional funding models and enabling decentralized innovation. The platform utilizes various features of Solidity, including structs, mappings, and events, to enable the creation, management, and tracking of projects, milestones, and investments. The web interface is developed using HTML, CSS, and JavaScript, with a Node.js backend that interacts with the smart contracts using the web3.js library.

Samer Ali Al–shami, Abdullah Al Mamun, Nurulizwa Rashid, Mohammed Al-shami

Microcredit financing is extensively considered as an effective development method for poverty mitigation and women empowerment. Nevertheless, relevant studies reflected opposing outcomes on microfinance effects consisting of positive, zero, and negative impacts. Thus, this research investigated Al-Amal Bank’s microcredit impacts on women empowerment in Yemen, one of the poorest Middle Eastern nations. A panel dataset and primary and secondary data were gathered through household surveys and propensity score matching to restrict intangible variables’ possible effects. The empirical results revealed that microcredit had a significant positive effect on monthly household incomes and accumulated asset values. Although microcredit facilitated female entrepreneurship and income generation for improved household incomes and expenditure, no influence was found on female household decisions and mobility following the patriarchal system practised in many Arabian nations, including Yemen. Hence, the study finding has theoretically and practically contributed to the body of knowledge in three ways. First, a novel proof of how microcredit interactions affected several Yemeni women empowerment elements was identified. This study also provides new insight into the empowerment theory by explaining how access to microcredit influences numerous features of women’s economic and social empowerment. Lastly, social and family traditions significantly influenced female attributes and lifestyles by reflecting how communal and family rituals affected microcredit impacts on women empowerment and vice versa. Conversely, this study guides Yemeni policymakers and those from other nations on extending financial services for self-development to reduce poverty and drive women empowerment rather than relying on government and international agencies.

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.

Chengfu Wang, Xiangfeng Chen, Wei Jin, Xiaojun Fan

No abstract is available for this record.

Tarkhani Ayoob Ibrahim Ahmed, Mohamad Sabri B. Zakaria

This research study will endeavour, in principle, to make a significant contribution to the field of zakat management. It basically aims at suggesting a unique approach that would be practical and effective in managing the zakat sector through blockchain technology. The paper additionally deals with several current challenges encountered in the adopted approaches of managing zakat in Muslim societies; including, inter alia, inefficiency, lack of transparency in terms of fund collection, managing and distribution. In the meantime, it is hoped that blockchain technology would be adoptable effectively to address such relevant problems in a transparent and immutable manner in effect. This article will basically adopt the qualitative and data collection method. Main data will be collected through articles and dissertations because related data mainly exists in the articles and thesis rather than books. This study assumes certain fiqhi (Islamic jurisprudence) issues of using blockchain for managing zakat distribution such as establishing full-possession or tamlīk (Ownership), transporting zakat funds, and transferring zakat funds directly without ruler or government interference. The findings of this paper indicate that providing a novel method, which would contribute to reducing routine procedures and playing an effective role to put an end to the administrative and financial inefficiencies that have paralysed zakat institutions. The main significant aspect of this research will be establishing an active Technological Department for the purpose of serving charitable projects and reconstructing the trust between groups managing zakat and donors.

Alexandra Panman, Ian Madison, Nyambiri Nanai Kimacha, Jean‐Benoît Falisse

Abstract This paper explores the role of savings groups in resilience to urban climate-related disasters. Savings groups are a rapidly growing phenomenon in Africa. They are decentralized, non-institutional groups that provide millions of people excluded from the formal banking sector with a trusted, accessible, and relatively simple source of microfinance. Yet there is little work on the impacts of savings groups on resilience to disasters. In this paper, we use a combination of quantitative and qualitative evidence from Dar es Salaam (Tanzania) to shed new light on the role that savings groups play in helping households cope with climate-related shocks. Drawing on new data, we show that approximately one-quarter of households have at least one member in a group, and that these households recover from flood events faster than those who do not. We further argue that the structure of savings groups allows for considerable group oversight, reducing the high costs of monitoring and sanctioning that often undermine cooperative engagement in urban areas. This makes the savings group model a uniquely flexible form of financing that is well adapted to helping households cope with shocks such as repeated flooding. In addition to this, we posit that they may provide a foundation for community initiatives focusing on preventative action.

Mark J. P. Anson

As the initial coin offering (ICO) market waned in 2018, a new format for crowdfunding arose: initial exchange offerings (IEOs). Although the downturn of the ICO market undoubtedly contributed to the development of IEOs, this is also part of the natural evolution of raising capital through cryptocurrencies. Scams, regulatory issues, manipulation, and random speculation have all been associated with ICOs. Conversely, IEOs put the good name and reputation of a cryptocurrency exchange behind the token offering, providing a level of fairness, integrity, and safety not always offered through the ICO market. This article demonstrates that the additional level of due diligence conducted in an IEO increases token fundraising success. <b>TOPICS:</b>Currency, exchanges/markets/clearinghouses, risk management <b>Key Findings</b> ▪ Initial exchange offerings (IEOs) allow companies to raise capital by selling utility tokens on an exchange. Because the cryptocurrency exchange performs due diligence on the offering to protect its customers and its reputation, IEOs are less risky investments than initial coin offerings (ICOs). ▪ Utility tokens are one type of cryptocurrency that usually provides the holder preferential access to the sponsoring firm’s services and does not represent ownership in the sponsoring firm raising funds and are not considered securities. Nevertheless, utility tokens sold on a cryptocurrency exchange (IEOs) provide several advantages to both firms seeking to raise funds and their investors relative to those that are not (ICOs). ▪ Empirical results demonstrate that firms offering utility tokens are more successful in raising money if they do so through IEOs, rather than using an ICO approach. Results indicate that whether or not firms sell tokens on a cryptocurrency exchange is more important than traditional ICO success factors.

Sherin Kunhibava, Zakariya Mustapha, Aishath Muneeza, Auwal Adam Sa’ad · 5 authors

Purpose This paper aims to explore issues arising from ṣukūk (Islamic bonds) on blockchain, including Sharīʾah (Islamic law) and legal matters. Design/methodology/approach A qualitative methodology is used in conducting this research where relevant literature on ṣukūk was reviewed. Through a doctrinal approach, the paper presents analyses on the practice of ṣukūk and ṣukūk on blockchain by discussing its legal, Sharīʾah and regulatory issues. This culminates in a conceptual analysis of blockchain ṣukūk and its peculiar challenges. Findings This paper reveals that digitizing ṣukūk issuance through blockchain remedies certain inefficiencies associated with ṣukūk transactions. Indeed, structuring ṣukūk on a blockchain platform can increase transparency of underlying ṣukūk assets and cash flows in addition to reducing costs and the number of intermediaries in ṣukūk transactions. The paper likewise brings to light legal, regulatory, Sharīʾah and cyber risks associated with ṣukūk on blockchain that confront investors, practitioners and regulators. This calls for deeper collaboration in research among Sharīʾah scholars, lawyers, regulators and information technology experts. Research limitations/implications As a pioneering subject, the paper notes the prospects of blockchain ṣukūk and the current dearth of literature on it. The paper would assist relevant Islamic capital market entities and authorities to determine the potential and impact of blockchain ṣukūk in their respective businesses and the financial system. Practical implications Blockchain ṣukūk will assist in addressing issues inherent in classical ṣukūk and in paving the way to innovative solutions that will facilitate and enhance the quality of ṣukūk transactions. For that, ṣukūk would require appropriate regulatory technology to address its governance and regulation peculiarities. Originality/value Integrating ṣukūk with blockchain technology will add value to it. The paper advances the idea that blockchain ṣukūk revolutionises ṣukūk and enhances its practice against known inadequacies.

Pierluigi Martino

No abstract is available for this record.

İbrahım Musa Ünal, Ahmet Faruk Aysan

No abstract is available for this record.

Tatja Kärkkäinen

The four essays contained herein this study focus on recently emerged questions in the field of Financial Technology (FinTech). This new finance domain has a growing importance in the finance discipline, policy, and practice. The FinTech is the common theme, while the thesis is organised to investigate the open questions separately in the essays. The first essay assesses the required human capital in FinTech. Recent technological developments have enabled a wide array of new applications in financial markets, e.g. big data, cloud computing, artificial intelligence, blockchain, cryptocurrencies, peer-to-peer lending, crowdfunding, and robo-advising, inter alia. While traditionally comprising of computer programs and other technology used to support or enable banking and financial services, the new FinTech is often seen as enabling transformation of the financial industry. A more moderate and critical view suggests that for the full transformative potential of FinTech to be enabled, there is a need for an updated educational curriculum that balances knowledge and understanding of finance and technology. A curriculum that provides a skill portfolio in these two core components and complements them with applied knowledge. This essay also makes an inquiry into the educational curriculum in finance and technology, aiming to inform this modern educational agenda, and into the skills shortages, as identified by firms and experts with examining some of the first educational programmes in FinTech. The second essay investigates the relationship between financial literacy and attitudes to cryptocurrencies, using microdata from 15 countries. The financial literacy proxy exerts a large negative effect on the probability of currently owning cryptocurrencies. The financially literate are also more likely to be aware of cryptocurrencies, and less to own them due to their price volatility. In addition, data from a second survey of retail investors in three Asian countries is used to externally validify the financial literacy proxy and findings. I show that the relationship between financial literacy and attitudes to cryptocurrencies is moderated by a different perception of the financial risk involved in cryptocurrencies versus traditional investments by the more financially literate. The findings shed light on the demand for cryptocurrencies among the general population and suggest has been largely driven by unsophisticated investors. The third and fourth essays are closer in their empirical investigation of asset price timeseries data. In the third essay, I assess the bitcoin futures introduction into the retail investor driven marketplace. Bitcoin futures were introduced in December 2017 as an effort to provide institutional and retail investors with additional trading tools for bitcoin. This study analyses the bitcoin Futures mid-quote data from CBOE, and Bitcoin market index applying VAR and VECM process methodologies, Hasbrouck’s information share and the Gonzalo-Granger component share measurement to examine price discovery in bitcoin markets. The results drawn on the intra-day prices show that the futures are leading the price discovery at different frequencies even with comparably low futures trading volumes. The empirical results support the extant literature of futures-spot market price discovery and the role of informed traders in the futures market. Finally, the fourth essay attempts to evidence the network externalities on digital assets using exchange-listed Initial Coin Offerings (ICOs) data. Utilising an online database comprising of self-reported ICO characteristics, measures of post-ICO performance, along with information on business social networks, higher fundraising figures are found to contribute positively to the ICO long-term success. This positive impact is multiplied by six times when fundraising is conducted to an existing, proprietary blockchain. This large impact is explained by the network effect. The modified information ratio measure is introduced to approximate the comparative quality signalling of ICO organisations using price timeseries and benchmarking these to already functioning blockchain technology, e.g. ethereum in the long-term. The ICO sample’s mean trading period on an exchange is 1.5 years and is used for long-period asset analysis. Additionally, the cointegration to the market technology benchmark is found to have a large, significant negative effect on long-term ICO organisational success as this indicates lower ICO intrinsic value. The final concluding chapter summarises the thesis contribution, implications and a selection of future research avenues relating to FinTech research sub-field.