The rise of digital currencies has led to the entry of non-bank institutions into the payments industry. Electronic money was introduced in the 1990s to offer a faster, more cost-effective, and user-friendly alternative to the bank-based payment system. Bitcoin, introduced in 2008, revolutionised payments through distributed ledger technology. In 2019, Facebook&s;s Diem proposed a stable digital currency with the potential to become a widely accepted means of payment. Unlike non-stable digital currencies, stablecoins are backed by a pool of assets and can be claimed by the user. The European Union regulatory framework distinguishes between means of payment issued or guaranteed by public authorities with a sovereign fiat value and virtual currencies and stablecoins that lack fiat and crypto characteristics. Sovereign units of account-based means of payment are generally more in demand and can be considered money. The shift towards new digital currencies instead of cash and bank deposits may impact the bank-based payment system and disrupt monetary policy and financial stability. Governments, regulators, and central banks are concerned about global stablecoins. This chapter examines the impact of a global stablecoin on the current banking ecosystem, the monetary-financial system, and the euro area regulatory framework from the perspective of stablecoin emergence.
Die Globalisierung schreitet stetig voran, sowohl im alltäglichen Leben als auch in der Finanzwelt. Kryptowährungen haben sich seit Jahren als eine Alternative zu konventionellen Währungen entwickelt. Jedoch ist es für Anleger schwierig die Risiken und das Verlustpotenzial richtig einzuschätzen und zu interpretieren. Die Einflussfaktoren, welche die enorme Volatilität im Kryptowährungsmarkt vorantreiben werden zu oft unterschätzt. Eine mögliche Vergleichbarkeit von Kryptowährungen mit etablierten Assets wie Aktien oder Währungen würde hierbei helfen, um eine Erkenntnis über einen möglichen Zusammenhang zu erlangen und somit ein besseres Verständnis für den Kryptowährungsmarkt zu erlangen. Die Forschungsfragen dieser Arbeit befassen sich mit der Korrelation von Kryptowährungen und etablierten Assetklassen und den Einflussfaktoren, welche die Volatilität im Kryptowährungsmarkt beeinflussen. Das Ergebnis dieser Forschungsarbeit ergab, dass Kryptowährungen phasenweise mit etablierten Assetklassen korrelieren, jedoch nicht abschätzbar ist inwiefern makroökonomische Ereignisse darauf Einfluss haben.
Abstract We develop a continuous‐time control approach to optimal trading in a Proof‐of‐Stake (PoS) blockchain, formulated as a consumption‐investment problem that aims to strike the optimal balance between a participant's (or agent's) utility from holding/trading stakes and utility from consumption. We present solutions via dynamic programming and the Hamilton–Jacobi–Bellman (HJB) equations. When the utility functions are linear or convex, we derive close‐form solutions and show that the bang‐bang strategy is optimal (i.e., always buy or sell at full capacity). Furthermore, we bring out the explicit connection between the rate of return in trading/holding stakes and the participant's risk‐adjusted valuation of the stakes. In particular, we show when a participant is risk‐neutral or risk‐seeking, corresponding to the risk‐adjusted valuation being a martingale or a sub‐martingale, the optimal strategy must be to either buy all the time, sell all the time, or first buy then sell, and with both buying and selling executed at full capacity. We also propose a risk‐control version of the consumption‐investment problem; and for a special case, the “stake‐parity” problem, we show a mean‐reverting strategy is optimal.
Bu çalışmada popülerliği son yıllarda artan kripto paralar sınıfında değerlendirilen Bitcoin ile Euro getirileri arasındaki volatilite etkileşimini incelemek için 02.02.2014-28.02.2021 dönemine ait günlük veriler kullanılmıştır. Değişkenlere ait getirilerin zaman içindeki hareketini incelemek için oluşturulan grafiklerden volatilite kümelenmesi tespit edilmiş ve çok değişkenli GARCH modelleri kullanılmıştır. Modellerden elde edilen sonuçlar karşılaştırılarak log-olabilirlik değeri en küçük(negatif olarak) bulunan BEKK-GARCH modeli uygun model kabul edilerek Euro ile Bitcoin arasında çift yönlü volatilite etkileşimi bulunmuştur. Ayrıca DCC-GARCH modeli sonuçlarına göre ise iki getiri arasında asimetri ilişkisi ve oranında pozitif, güçlü bir dinamik korelasyon tespit edilmiştir.
Kripto valute definiramo kao digitalni novac, odnosno zapise unutar programa koji su implementirani na više međusobno povezanih računala, s krucijalnom karakteristikom nepostojanja središnje institucije koja ih izdaje ili upravlja njima. U završnom radu razmatra se značaj kripto valute u ekonomiji te se time istražuju ekonomske implikacije kripto valuta kroz analizu slučaja na primjeru Bitcoina kojom je prikazano ispunjavanje potreba kompleksnog tržišta današnjice uz kontrolu mase u čijem je vlasništvu. Jedan od razlog stvaranja Bitcoina bio je odgovor na globalnu ekonomsku krizu 2008. godine, kada je nestabilnost tradicionalnih valuta i bankarstva stvorila novu potrebu za alternativnom imovinom i ulaganjima bez središnje vlade ili bankarske organizacije. Bitcoin je prva digitalna valuta konstruirana na decentraliziran način. Faktori koji utječu na porast popularnosti kripto valuta su velika praktičnost i brzina obavljanja elektroničkih transakcija.
Janusz Brzeszczyński, Jerzy Gajdka, Tomasz Schabek
Abstract Research background: Bitcoin is the most popular financial instrument within the new cryptocurrencies class, which emerged in the wake of the financial crisis of 2007/2008. Purpose: The purpose of this paper is to provide an analysis of Bitcoin from the perspective of the Polish market investor. More specifically, the aim of the empirical research presented in this study has been twofold: (1) comparison of Bitcoin with other currencies using returns and risk captured by the standard deviation of returns and (2) assessment of the sensitivity of the BTC/PLN exchange rate to the NBP’s monetary policy announcements. Results: Bitcoin appears to be weakly related to other currency exchange rates against the Polish zloty and the monetary policy announcements of the National Bank of Poland (NBP) have, effectively, no influence on the determination of the BTC/PLN exchange rate. Novelty: We discuss extensively the Bitcoin as a new asset on the financial market and we present the investigation of the BTC/PLN reactions to the monetary policy announcements in Poland, which is a novel analysis for this instrument using the Polish market data.
The European Union (EU) is under pressure. Crises, undesirable developments, and loss of confidence are mixed up into a diffuse picture of justified criticism, unease, ignorance, and populist rejection. Paradoxically, perhaps the fact that the EU, with all of its advantages, is so naturally present in the everyday lives of citizens today implies a risk for future of European integration. What is taken for granted may suddenly dissolve, not overnight, but in a creeping process that will only be realized in a historical retrospective. The EU has been in a crisis mode for several years now,12 culminating in a ‘poly-crisis’ in 2016. With the global financial crisis and the crisis in the euro area fuelled by it,3 as well as the migration and security crisis in the ‘area of freedom, security and justice’ (the so-called Schengen Area),4 it became evident that two of the integration steps initiated with the Maastricht Treaty in 1992 had led to ‘fair weather areas’ that were not sufficiently prepared for stormy times. In addition, Brexit has, for the first time, confronted the EU with the challenge of dealing with the withdrawal of a member state in organizational (Article 50 of the Treaty of European Union (TEU)) and—behind the scenes—in political terms: The impression of an EU in constant crisis, unable to deliver solutions and stability is supposed to be one of the—many—reasons for the negative result of the British referendum in 2016.5 There can be no doubt that European integration has been a successful project for peace, one which started in 1951 with the creation of a common market for coal and steel (European Coal and Steel Community (ECSC) Treaty). It was in this spirit that the Treaty on the European Economic Community (EEC Treaty) of 1957 emphasized in its preamble the goal of an ‘ever closer union’, in the course of which the integration of the national economies into a single market was to serve to secure peace and motivate Europe’s states and peoples subsequently to pursue political integration too. With the EEC Treaty and the 1985 White Paper on the completion of the internal market, including the limited 1986 reform treaty (the Single European Act), a European single market gradually came into being. Implementation of the single market brought in its wake the Europeanization and partial harmonization of flanking policies, resulting in the development of European environment, health, consumer protection and—in part—social policies.6 This made the EU a European community of values, a process reinforced by the 1992 Maastricht Treaty: drawing lessons from the dictatorships of the twentieth century, it guarantees human rights, democracy, and the rule of law.7 However, what has been achieved threatens to erode: a common and efficient response to the crises is made difficult because there is no consensus, either among the 27 among European on the and future of the EU This is not to the fact that in the euro area on as the Europeanization of financial and with for national In the Schengen no are in the area of a European and including internal security with to the European internal market, the of which is to as a result of and the with it and in the of and a difficult to In an EU that has 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democracy, the rule of and for human are the to the the of the EU a of and by all member states as a for to the EU the of the of national and in the The of the that all a of in of the rule of democracy, and the of and for the of the and by all EU with to the EU the of national and the common of European a of to this European and national are and a in the of which is not only to the European the European to and national In the of European integration this in the process of that European a the of a political by which the European of can be The European rule of is the of European of the rule of the EU is a of It was the European first the of to that the of European is a and a for the common the with which is by the and the of of the European Union as as 1986 it has the European Economic Community as community on the rule of of the in which the the Community are from are in with the the the as a and In the of the to from the of the the Treaty on the to its a state to to its of national the 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After the launch of Bitcoin in 2008 and the subsequent introduction of more than 6,600 cryptocurrencies, a new wave of innovative payment projects is currently on its way, including innovations like Libra - designed as a supranational stable coin - and central bank digital currencies (CBDCs). Various interrelations link these private and public projects. Contrary to the original intentions, Bitcoin has not developed into a widespread means of payments, not the least due to its considerable price volatility. Its most significant contribution could be the "proof of concept" for an innovative, private means of payment outside the conventional monetary system. In contrast, Libra is designed as a rather conventional means of payment with close relations with the existing banking sector, which raises numerous policy questions concerning monetary and financial stability. Central bank digital currencies could be viewed as a public sector response to these private projects to secure central banks' predominant role in the monetary system of the future.
Within the new domain of the crypto-asset – which can be described as a ‘digital asset that may depend on cryptography and exists on distributed ledger’ – initial coin offerings (ICOs) have attracted the attention of financial authorities and regulators worldwide. Over the last two years, legislative initiatives regarding this phenomenon have proliferated within the European Union member states and are now driving the European Commission to act. This action is based on the common opinion that ICOs should present remarkable peculiarities and potentialities among the alternative forms of financing for small and medium enterprises. In this regard, this paper proposes an innovative and ad hoc regulatory approach for all ICO categories, including ones that issue tokens considered to be securities. This research is based upon the recognition that the traditional legal framework was not designed to face the specific needs and risks posed by these instruments, neither from the perspective of consumer protection nor from the view that serious operators need rules regarding.
Alexander Bechtel, Agata Ferreira, Jonas Groß, Philipp Sandner
Distributed ledger technology (DLT) hasDistributed ledger technologies (DLTs) the potential to address long-standing industrial challenges, remove frictions, build trust, and unlock new value across businesses and industries. It enables decentralization, the immutability of data, transparency, and the automation of business processes. Thereby, it creates a multitude of use cases ranging from energy and manufacturing to mobility and logistics. However, a digitized economy based on DLT can flourish only if it does not merely enable the exchange of assets, goods, and services but also the exchange of money. In other words, there is a need for a payment solution that is compatible with DLT-based decentralized networks and enables transactions denominated in euro. This is particulary relevant in the currently evolving geopolitical environment.
Abstract The chapter examines the process of payment, both as a description of the way in which a monetary obligation is discharged, and as a process by which money is transmitted from one person to another. In the former case, the chapter describes the operation of set-off, netting, consolidation of accounts and the operation of running accounts. In the latter case, it deals with the mechanisms for payment in the UK, internationally and at the level of the EU through the TARGET2 system, focusing in each case on the process of clearing through the central bank of the currency concerned. It also discusses Distributed Ledger Technology (DLT) and its use in payment and clearing systems.
Denken wir an Geld, haben wir instinktiv Geldscheine und Munzen vor Augen. Dabei ist im Euroraum die Geldmenge, die auf den Bankkonten liegt und uber die wir mit dem Griff zur Giro- oder Kreditkart...
Cryptocurrencies have been in vogue ever since Bitcoin first appeared in 2008. From that moment on, a new potential market started evolving and is nowadays a daily topic for everyone involved in the financial and monetary markets. Cryptocurrencies presented themselves as a viable alternative to traditional currencies, with a lot of new interesting features, but also several aspects that split the opinions between those who understand it as a great alternative for the future and the more skeptical ones who still question its legality and use. Nowadays, cryptocurrency is one of the most interesting topics in the financial markets due to all the controversy associated, as well as the public acceptance, responsible for the huge prices that these coins have been reaching. In this dissertation, we aim to analyze every aspect concerning cryptocurrencies. With the intention to clarify the most important details about this new market, all these details have been scrutinized, from the several different types of cryptocurrencies and its behavior, to the factors that have an impact in cryptocurrencies prices. Cryptocurrency is still a trendy and unknown subject to many people, and that was the motivation and the main objective of this dissertation, to clarify everyone about this topic before thinking of investing in any of these new cryptocurrencies.
Bitcoin and other virtual currencies are becoming increasingly important. They are not money but are being used by a growing group of people as a means of payment and investment. Central banks and regulatory authorities have identified risks and see a need for regulation. Regulation areas with a high priority in the EU concern consumer protection, Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). The EU institutions are currently revamping the AML Directive in order to include virtual currencies for the first time. An international coordination on the regulation of virtual currencies is on the agenda of Finance Ministers and Central Bank Governors of G20 countries.