Publicly traded securities generally are held by investors in securities accounts with intermediaries such as stockbrokers and central securities depositories â intermediated securities. For many investors this is the only practical means of holding and dealing with securities. These intermediated holding systems (IHSs) impose a variety of risks and costs. Investors are exposed to intermediary risk (default or insolvency of an intermediary holding securities) as well as impediments to the exercise of rights such as voting and asserting claims against securities issuers. The nontransparency of IHSs imposes other social costs, such as obstacles to anti-money laundering enforcement. The emergence of FinTech and the potentially disruptive effects of distributed ledger technology (blockchain) now present realistic opportunities for reforms of securities holding infrastructures that would increase transparency and allow investors to hold securities directly on the books of their issuers.
This article proposes a âNew Platform Systemâ (NPS) for the direct holding of securities that would connect issuers and investors and also connect both with trading and settlement systems (which would remain intact, at least for now). Unlike other recent transparency and direct holding proposals, the NPS would cover both equity and debt securities and would flexibly accommodate beneficial aspects of current IHSs, such as margin lending, securities lending, and rehypothecation. The article presents a broader menu of problems that the NPS could resolve. The NPS addresses the probable objections that the intermediaries who benefit from the status quo would make to any transparency or direct holding proposals. Disintermediation likely would require regulatory intervention by the SEC in the United States. By offering reforms that would minimize the disruption of current market practices, the NPS could encourage intervention and blunt opposition. It also could provide a âprimordial soupâ for future, more extensive reforms of trading and settlement systems.
Aufgrund des Hypes um Bitcoin und Cryptocurrencys haben Blockchains in den letzten Jahren viel Aufmerksamkeit erhalten. Aber Cryptocurrencys sind bei weitem nicht die einzige Anwendung der Blockchaintechnologie. Smart Contract, also Applikationen die nach vordefinierten und unverĂ€nderbaren Regeln agieren, stellen eine weitere Anwendung dar. Solche Smart Contracts benötigen jedoch spezielle Platformen um ausgefĂŒhrt werden zu können: so gennante Smart Contract Platforms. Die momentan meistverwendete Plattform is Ethereum, aber es gibt weitere Plattformen die interessante Alternativen darstellen. Eine vielversprechende dieser möglichen Alternativen is NEO. NEO ist in vielen Belangen Ă€hnlich zu Ethereum, aber verspricht gleichzeitig einige Probleme zu lösen, mit denen sich Ethereum momentan konfroniert sieht wie zum Beispiel die schlechte Skalierbarkeit. Literatur, die sich mit den Unterschieden zwischen Ethereum and NEO befasst, ist spĂ€rlich. Vor allem NEO wird in der Literatur selten berĂŒcksichtigt, und falls NEO behandelt wird, dann passiert dies in der Regel nur oberflĂ€chlich. AuĂerdem haben die meisten Vergleiche und Evaluierungen von Smart Contract Plattformen beziehungsweise von Blockchains keine strukturierte Herangehensweise, sondern verwenden unterschiedliche Kriterien fĂŒr unterschiedliche Plattformen. Das bedeutet, dass die meiste Literatur zu diesem Thema eine Ăbersicht der Plattformen darstellt, aber wenig Hilfe bei der Auswahl von Smart Contract Plattformen liefert. Diese Arbeit schlieĂt diese LĂŒcke, indem sie einen detalierten Vergleich von Ethereum und NEO durchfĂŒhrt. Um eine strukturierte Herangehensweise zu gewĂ€hrleiten, wird in dieser Arbeit ein Kriterienkatalog basierend auf Kritierien in wissenschaftlicher Literatur abgeleitet. Dieser Kriterienkatalog wird anschlieĂend auf die beiden Plattformen Ethereum und NEO angewandt um die fĂŒr den Vergleich notwendigen Daten zu erhalten, die dazu dienen, die relevanten Gemeinsamkeiten und Unterschiede zwischen Ethereum und NEO zu identifieren. Des weiteren ermöglicht dies eine Diskussion ĂŒber die Auswirkungen dieser Unterschiede. Die Ergebnisse der Arbeit zeigen, dass obwohl Ethereum und NEO auf den ersten Blick sehr Ă€hnlich zu sein scheinen, diese doch markante Unterschiede aufweisen. Die Unterschiede reichen vom allgemeinen Ziel der Plattform ĂŒber die Reife der Dokumentation und Plattformfeatures bis hin zu praktischen Kritierien wie den Kosten fĂŒr die Erstellung von Smart Contracts.
The rapid development of digital technologies such as blockchain and distributed ledger-based systems holds transformative potential for the financial sector. Promising applications include asset management as well as peer-to-peer networks for the transparent exchange of data and information. International climate finance stands to benefit in particular ways from these new opportunities in financial technology. Distributed ledger technologies could be leveraged to support climate action, for example by facilitating transparent and standardized transactions, or by enabling more efficient monitoring and accreditation processes. In view of these promising opportunities, we focus our inquiry on the case of the Green Climate Fund to explore how distributed ledger technologies can be used for innovative climate finance. Based on our analysis of different digital system models and potential use cases, we then discuss some of the technical and political challenges that may arise, for example with regard to standards and safeguards, governance processes, country ownership, and further capitalization. Our findings show that distributed ledger-based systems could benefit the work of the fund in key areas such as multi-stakeholder coordination and impact assessment. However, our analysis also points to the concrete limitations of technology driven solutions. Digital technologies are not a standalone solution to persistent resource allocation and governance challenges in international climate finance, especially because the design and deployment of these digital systems is inherently political.
This study aims to explore cryptocurrency investment experiences from an emerging market context. This study investigates the lived experiences of cryptocurrency investors, the potential risks and benefits of the cryptocurrency investment, and the potential prospects from cryptocurrency investors' perspectives. The current study intends to adopt a qualitative research approach to address the phenomenon of the study. The qualitative study employs interviews as a data collection tool that allows researchers to seek people's stories from their lived experiences. In this regard, the interpretivism paradigm is employed as it indicates that people determine the reality around events rather than other factors. Moreover, the purposive sampling technique is adopted to discover and recruit the current study respondents, which were in alignment with the proposed research questions. The interviews were terminated at the point of saturation, where a total of twelve cryptocurrency investors participated in the survey.
This paper provides a comparative analysis of the new blockchain-based start-up and small companies funding methods, namely, initial coin offerings (ICOs) and security token offerings (STOs) against the backdrop of traditional fundraising methods like venture capital and private equity building on the experience of Switzerland. In particular, the comparative analysis is based on a theoretical overview of the nature of these blockchain applications, the relevant legislative framework as well as recent market developments with a focus on Switzerland. The paper concludes that both ICOs and STOs are characterized by lower entry barriers for investors and higher cost efficiency as compared to traditional start-up fundraising methods. However, STOs provide more security to investors than ICOs due to their wider regulation.
A project on the use of distributed registry technology to improve funding for start-ups in Japan has been considered. The project is based on the application of distributed registry technology, smart contracts, a big database of start-ups credit risk (in Japan CRDS), a local investment fund, a unified marketing and trading platform. The model of investor behavior (taking into account risk and profitability) has made it possible to show, that with growing investor confidence (individuals and households) and a certain level of profitability of startups, investing in startups will be more preferable, than a bank deposit. The features of the project have been highlighted and a conclusion has been made, that under certain conditions, the adduced scheme for financing start-ups can be used in Russia, for example, by the Industry Development Fund.
Since 2013, Initial Coin Offerings (ICO) have allowed companies to attract financing with the help of cryptocurrencies. Statistics of ICO shows that the ICO market is increasing and demand for funds continues to grow with claims of over $ 15 billion raised in the first half of 2018. The increasing volumes of investment in ICO projects as an alternative method to venture capital or IPO are caused by, for example, the possibility of reselling the received tokens at a higher price after the launch of the project or obtaining the companyâs services at lower prices. While the importance of the topic is growing, there is the absence of fundamental works emphasizing the determinants of an ICOâs success. The scientific novelty of the forthcoming research consists in the formation of the model evaluation of ICO success. Using econometric analysis based on data for 1392 projects, we show that the volatility of the main cryptocurrencies has a significant impact on the success of ICO. The constraints of the platform for Smart Contacts (ERC-20) and dependence on the Ethereum volatility overcome all other factors. Our data contributes to existing literature and shows the insignificance e of the sector of the project, almost all location region and fl of infl e of quality of the team. This result may be explained by the uncertainty of the investor about the project (weak signals), absence of the regulation and legal framework. This result is beneficial for owners of companies since it is an argument for decreasing costs for marketing.
Do-hun Kim, Dong-Hwan Kim, DongâHo Lee, Sunjoo Park · 5 authors
With the institutionalization of reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks in developing countries (REDD+), the global REDD+ financial network has been formed to support the implementation of REDD+ in developing countries. Although the rapid expansion of the network made it decentralized, it is still a highly centralized network in terms of the distribution of financial resources, revolving around only a few major actors. While the source of financing was diversified due to an increase in influential donors, the majority of financing still came from a few constant major donors, and a few constant major developing countries received most of the financial support. Although increases in donor numbers and the amount of finance received can provide more chances to support developing countries, it may cause inefficiency due to overlaps and duplications. Also, over-centralization of financial resources can be ineffective in terms of achieving maximum greenhouse gas (GHG) reduction, and can broaden gaps between developing countriesâ ability to cope with climate change and deforestation. Lack of coordination among donors and the differing capacity of developing countries may have caused centralization of financial resources in the global REDD+ financial network. To minimize this problem, a comprehensive monitoring system and platforms for information sharing are needed.
Open access
Conservation, Biodiversity, and Resource Management
Dirk Andreas Zetzsche, Ross P. Buckley, Douglas W. Arner, Anton N. Didenko
The transformative potential of distributed ledger technology (DLT) is attracting significant interest around the world. Many institutions are investing heavily in proof of concept demonstrations, pilot initiatives and the rollout of applications of DLT. Part of the attraction of distributed ledger systems, such as blockchain, lies in their perceived ability to transcend law and regulation. Yet, while the law may be dull and the technology exciting, the impact of the law cannot be simply wished away. With data distributed among many ledgers, legal risks will remain. Legal relationships recorded on, or evidenced by, distributed ledgers may give rise to various forms of liability based on contract, tort, partnership or joint venture structures, specific legislation or breach of fiduciary duties. At the same time, despite existing similarities among common law and civil law systems, the sources of DLT-linked liability may vary substantially across jurisdictions.
For the financial industry, the need to manage high-quality liquid assets (HQLA) efficiently and the related topic of collateral mobility are more relevant than ever. In the aftermath of the global financial crisis, they have posed a significant challenge for the industry. Progress on this issue is strongly linked to the evolution of new technologies. This paper assesses the current situation and how distributed ledger technology (DLT) can help to address this subject and improve the securities lending market. It examines which aspects need to be taken into consideration when designing a DLT solution, how it can be implemented and what are the next steps on our way to solving one of the most pressing issues for the future of financial services.
Purpose The purpose of this paper is to introduce the notion of blockchain as an institutional technology, defend the idea of National Innovation Systems as institutional systems, and then make use of the theory of institutional competition to characterise challenges posed by innovation public policy by blockchain technology. Design/methodology/approach The approach is to consider the nature of blockchain technology as an institutional technology, and to consider the nature of National Innovation Systems as institutional systems. The author then applies a theory of institutional competition developed elsewhere to appraise the interaction of the two. Findings The author expects for there to emerge sustained competition for National Innovation Systems from innovation systems implemented using blockchains. There will be pressure exerted by the latter upon the former to become more integrated, secure, usable and to greater support profit expectations for entrepreneurs. Originality/value The theory of institutional competition upon which this work is based makes use of cutting-edge behavioural and institutional economics. It has hitherto only been applied at a general level and has not been applied to a specific set of institutions such as National Innovation Systems.
istributed ledger technology (DLT) and blockchain, and their headline-catching applications in cryptoassets and initial coin offerings (ICOs), have attracted extraordinary global attention. Alongside Bitcoin's spectacular rise and fall in the past few years, there has been an explosion of ICOs, a tokenization of assets, and fund-raising projects utilizing digital tokens issued and operated on blockchains.
The article examines the rapidly developing area of blockchain finance as a potential opportunity for new creative ventures to obtain external investment funding and generate revenues. We focus on the music industry, as an example of how alternative Internet-based finance utilizing blockchain could provide opportunities for start-up funding and ongoing revenue streams. Our pioneering pilot research findings are drawn from literature review and emerging case studies, and are grounded in the academic literature of start-up funding gaps. Although some expect blockchain technology to remove intermediaries, facilitating a direct relationship between artist and fan, initial findings are that intermediation in some form will remain. The articleâs central focus is the crucial emerging role of these facilitator organizations â the new breed of financial intermediaries or âinfomediariesâ. We examine this evolving process through adoption and development of financial intermediation theory, exploring the wider financial intermediary concept of incubators and accelerators as expert investors and promoters of new and very early-stage ventures â including artists. The article poses the question of whether blockchain technology offers a new, more cooperative approach for creative ventures, or merely the reinvention of existing corporate structures, for instance, the three major record labels that currently dominate recorded music. The article identifies four possible paths for the adoption of blockchain technology within the music industry, ranging from the anarcho-libertarian to the corporate and from the âutopianâ to the âdystopianâ.