The growing presence of institutional capital in crypto asset markets has reopened the debate on whether Bitcoin and similar digital assets can act as safe havens, the way gold or sovereign bonds have been built historically. This thesis tackles that question with a quantitative framework rather than the qualitative arguments that dominated the early literature. The dataset covers November 2019 to May 2026 (2,380 daily observations for Bitcoin, 2,381 for the full asset universe). I fit GARCH-t and EGARCH-t models to capture conditional variance, apply Extreme Value Theory to isolate the tail directly, and run Monte Carlo simulation to estimate capital requirements over 30-day horizon.
Discover how Tokemak is revolutionizing decentralized finance through its advanced liquidity management solution. Get insight into the protocol's mechanism, governance structure, token purpose, and the significance of its emergence in the DeFi world.
Cryptocurrency regulation faces a fundamental mismatch between static rules and rapidly transforming markets. We demonstrate that Bitcoin alternates between bounded and unbounded price regimes, requiring adaptive rather than uniform regulatory frameworks. Using extreme value theory on over a decade of Bitcoin data, we show that tail risk characteristics switch between finite-limit and heavy-tailed regimes, with profound implications for investor protection, capital requirements, and systemic risk management. Traditional approaches either overregulate during stable periods or underprotect during volatile regimes. We propose regime-contingent regulatory frameworks that automatically adjust oversight intensity based on statistical detection of tail risk characteristics. Backtesting over 2016â2025 demonstrates that the adaptive framework reduces average capital requirements by 79% overall and by 84% during bounded regimes while escalating protections before major crashes, outperforming static Basel III-style rules. Robustness analyses across multiple window lengths (90, 180, 365, and 730 days), thresholds, and bootstrap specifications confirm that regime-switching is a persistent structural feature of Bitcoin markets. Implementation requires international coordination, transparent methodology, and clear adjustment protocols.
This chapter examines the transformative influence of financial technology (FinTech) on audit, compliance, and capital markets â three pillars that sustain trust, transparency, and efficiency in the global financial system. Rapid advances in automation, artificial intelligence (AI), blockchain, and predictive analytics are reshaping how institutions manage risk, monitor transactions, conduct audits, and maintain regulatory adherence. FinTech applications are enabling real-time oversight, reducing manual errors, accelerating reporting cycles, and enhancing fraud detection capabilities through intelligent, datadriven systems. Simultaneously, capital markets are undergoing significant digital modernization, with algorithmic trading, tokenization, distributed ledger technologies (DLT), and digital asset platforms redefining how securities are issued, traded, and settled. By analyzing both operational advancements and emerging challenges, this chapter provides a comprehensive understanding of how FinTech is modernizing conventional financial processes while preparing institutions for a more automated, transparent, and resilient market environment.
This research examines the determinants of Bitcoin (BTC) valuation from January 2011 to December 2025 using Autoregressive Distributed Lag (ARDL) models. The empirical evidence supports the hypothesis that the monetary policy of the United States Federal Reserveâspecifically liquidity expansion and interest rate adjustmentsâdrives price dynamics, confirming a pro-cyclical nexus. At the microeconomic level, the density of active institutional addresses and the marginal cost of production significantly influence price trajectories. Furthermore, heightened market volatility, represented by the VIX, exerts a statistically significant negative impact on BTC returns. The findings suggest that Bitcoin has transitioned into a sophisticated value asset, underpinned by production efficiencies and an expanding institutional base. Consequently, Bitcoin represents a viable alternative to centralised financial systems, offering a potential hedge against inflation and the erosion of purchasing power. The study concludes that digital assets warrant inclusion within conservative institutional portfolios, notwithstanding the inherent speculative nature of the market.
We develop a semi-endogenous growth model in which firms freely use public data, generating a feedback from public spending to data, output, and fiscal capacity. In the decentralized equilibrium, firms are oversized and product variety insufficient, even when the government supplies data optimally. We derive implementable policies that decentralize the plannerâs allocation: an optimal tax to finance public goods and data, and an entry subsidy that lowers barriers. Quantitative exercises corroborate the theory and quantify the contribution of public data.
Derived from original PMR research written by Bastien Buchwalter, Jean-Michel Maeso, and Vincent Milhau using AI and an editor
Quickly apply original, key PMR-published papers with Snapshotsâa short article companion that distills PMR research into compressed, digestible takeaways, so you can put the paperâs core ideas to work in your investment processâfast. This Snapshot is based on an article about cleaning cryptocurrency data so researchers and investors can build more reliable investable universes. It presents a three-step protocol for fixing market-cap spikes, Bitcoin-dominance dips, and volume anomalies in CoinMarketCap data while preserving prices and returns and improving aggregate market indicators for analysis.
ABSTRACT This article explores the application of demurrage money, a concept developed by Silvio Gesell, into Web3. Demurrage money, designed to discourage the hoarding of currency and prevent economic stagnation and concentrations in wealth, offers a potential remedy for the problems of traditional fiat and goldâbacked monetary systems. The article presents an overview of Web3, highlighting its core principles such as being decentralized, permissionless, community governed, and programmable. It critiques the limitations of current Web3 cryptocurrencies, particularly Bitcoin and other networks that have emerged since. By design these networks enable excessive asset storage and face sustainability challenges such as governance centralization and inadequate ecosystem funding. The article proposes that the implementation of a network coin tax, as a form of demurrage, would help to incentivize productive economic activity, decentralize coin ownership, provide reliable funding for node operators and ecosystem development and create opportunities for largeâscale public goods funding. Various monetary supply models are discussed, evaluating their compatibility with demurrage systems. The article concludes that demurrage based economic systems could lead to more resilient, equitable and sustainable Web3 ecosystems that have significant potential for making a global societal impact.
Since World War II, the US dollar (USD) has substantially increased its prominence in international financial systems, culminating in its position as the predominant currency, facilitating approximately 90% of global foreign exchange transactions. The reliance of most nations on the USD for international trade - particularly for oil, commodities, and other goods - has cemented its critical role in global finance and geopolitics. Hence, the usage of the USD supported and forged an economic and geopolitical function for the emitting country, the United States of America. The geopolitical implications and risks related to the USD hegemonic power in trade and financial transactions have become increasingly more striking, especially in recent decades and years. The sanctions imposed on Venezuela, Iran and more recently on Russia via the US dollar-dominated SWIFT payment system highlighted the potential threat posed by the USD hegemonic power in the global monetary system. However, in the new millennium, alternative digital currencies have begun to exert influence and have implicitly and explicitly posed a threat to that hegemony. Bitcoin and other cryptocurrencies, for instance, have enabled international transactions without reliance on USD use. Additionally, the emergence of several multi-currency Central Bank Digital Currencies (CBDCs) would allow nations to conduct cross-border payments using various currencies without passing through the USD as an intermediary. Our paper explores the geopolitical implications of USD use on the international stage and examines the potential opportunities and threats posed by these new digital currencies for countries.
This study presents a comprehensive analysis of the cryptocurrency market through the lens of classical and modern economic schools, focusing on key regulatory mechanisms: staking, halving, token burning, and asset locking. The relevance of the research stems from the need to develop a theoretical framework for managing the stability and liquidity of decentralized financial systems amid high volatility and technological transformation. The hypothesis posits that integrating principles from economic schools (classical, Keynesian, monetarist, Austrian, institutional) with algorithmic cryptocurrency mechanisms can create a hybrid model of market resilience. Using an interdisciplinary approach, including mathematical modeling, regression, and correlation analysis of data on Bitcoin, Ethereum, XRP, and BNB, the study confirmed Bitcoinâs dominant role as a systemic asset through token burning and vesting. The practical implications include recommendations for optimizing regulatory mechanisms, diversifying investment portfolios, and designing stress tests to mitigate systemic risks.
Money serves several roles: a medium of exchange to buy and sell without bartering; a unit of account to price goods consistently; a store of value to save purchasing power over time; a means to defer payment of future obligations like credit or loans. An agent based computer simulation program determine quantitatively the relative importance of these services. The main results showed that money for credit was by far the feature that achieved the largest overall production of wealth in the simulated societies. A conclusion from this study suggests that fomenting the use of internationally tradable currencies such as Bitcoin seems to be most promising pathway for international economic growth in the near future.
This written testimony was submitted to the Financial Services Regulation Committee of the United Kingdom House of Lords, in response to that Committeeâs âCall for evidenceâ on the âGrowth and proposed regulation of stablecoins in the UK,â https://committees.parliament.uk/call-for-evidence/3845/. This testimony provides an overview of the global stablecoin market and the current leading uses of stablecoins. The testimony also describes the unacceptable dangers that uninsured nonbank stablecoins pose to financial stability, economic welfare, consumer protection, monetary policy, regulatory compliance, and law enforcement. The testimony presents the following policy recommendations: (1) Stablecoins should be regulated in the same way as bank deposits. Only regulated banks should be allowed to issue or distribute stablecoins. Stablecoins should be required to satisfy the same prudential standards and provide the same consumer safeguards â including deposit insurance â as bank deposits. 2) Stablecoins should be issued and recorded exclusively on permissioned distributed ledgers that are controlled and administered by one or more designated banks. The designated banks should have full responsibility and accountability for ensuring that their stablecoins and their distributed ledgers fulfill all legal and contractual obligations. 3) To ensure compliance with AML/BSA/KYC requirements, stablecoin holders should be prohibited from holding their stablecoins in âunhostedâ private digital wallets. (4) Stablecoin reserves should be invested solely in central bank reserves or in government securities with a weighted average maturity of 20 days or less. (5) If â contrary to the foregoing recommendations â nonbanks are allowed to issue stablecoins, those issuers, crypto exchanges, other crypto trading platforms, and their affiliates and business partners should be prohibited from paying interest, rewards, or any other financial inducements to stablecoin holders for owning stablecoins or keeping their stablecoins at designated locations. The author also presented oral testimony (via Zoom) to the Committee, available at https://committees.parliament.uk/event/26299/formal-meeting-oral-evidence-session/.
Stablecoins digital assets designed to maintain a stable value by referencing a fiat currency or other reserve asset have moved from a niche instrument for crypto-exchange settlement to a systemically relevant layer of global financial infrastructure. As of mid-2026, the total stablecoin market capitalization stands at roughly $310â320 billion, concentrated overwhelmingly in two U.S. dollar-referenced tokens, Tether's USDT and Circle's USDC, which together account for approximately 80â83% of supply. This thesis examines the stablecoin sector across five interlocking dimensions: (1) the market structure and competitive dynamics among major issuers, including USDT, USDC, PayPal's PYUSD, First Digital's FDUSD, Ripple's RLUSD, and a fast-growing cohort of emerging entrants such as USD1, Ethena's USDe, and Sky's USDS; (2) the regulatory architecture now taking shape in the United States (the GENIUS Act and the pending CLARITY Act), the European Union (MiCA), Singapore (the MAS stablecoin framework), and other jurisdictions; (3) the parallel and often competing rise of central bank digital currencies (CBDCs); (4) the tokenization of real-world assets (RWAs), which is extending stablecoin-adjacent infrastructure into Treasuries, credit, and money-market funds; and (5) the practical adoption of stablecoins in cross-border payments, decentralized finance (DeFi), and institutional treasury and settlement operations. The analysis draws on issuer attestations, on-chain analytics platforms (DefiLlama, rwa.xyz, Artemis), central bank and BIS publications, and law-firm and industry research to provide a fact-based, source-grounded account of where the stablecoin sector stands and where the principal points of tensionâreserve transparency, monetary sovereignty, and interoperability are likely to shape its next phase of growth.
This paper tests whether Bitcoinâs four-year cycle persists in monthlyreturn dynamics after the assetâs recent institutionalization. Weestimate harmonic Fourier regressions with 48- and 24-month componentsand allow the cycle coefficients to shift after a May 2023 structuralbreakpoint. We compare an unconditional model with a macro-conditionedspecification that includes S\&P 500 and U.S. Dollar Index returns.The unconditional results indicate a significant post-break changeand a sharp reduction in cyclical amplitude. However, after controllingfor broader market and liquidity conditions, the residual four-yearcomponent loses statistical significance. The evidence suggests thatBitcoinâs historical halving-related rhythm has weakened and thatits return dynamics are increasingly linked to global macro-financialconditions.
Africa's monetary and financial system, which is currently developing dynamically after a prolonged period of neocolonial dependence on transnational financial groups and international capital, is following its own unique path of development, one that differs significantly from the financial trajectories of other global regions. Sub-Saharan Africa, in particular, showcases a unique experience in the evolution of its monetary system, characterized by the world's highest growth dynamics in fintech and electronic non-bank payments. The active, extensive development of Pan-African financial groups and the trend of them displacing foreign and transnational financial corporations from the African continent are intensifying each year. Africa is one of the global leaders in the development of decentralized finance and cryptocurrency mining. At the same time, the continent remains burdened with high levels of external public debt, accumulated primarily in the post-colonial period of its history. This debt hinders the economic development of African nations and their achievement of the Sustainable Development Goals. Concurrently, the scientific and political discourse on reforming the global financial architecture is becoming increasingly acute, as the current system in its present form is incapable of effectively countering new challenges, which have further exacerbated the problems accumulated over recent decades. Africa stands to be a primary beneficiary of a reform of the global monetary and financial system, within which it must assume an adequate position commensurate with its growing international role that reflects its deserving status in geopolitical and geo-economic terms. Sub-Saharan Africa has the potential to become the trigger that accelerates the reform of the global financial architecture and to serve as a unique testing ground for corresponding pilot projects.
Abdulla Aljuffairi, Mustafa Mohammed Shaker, Shrikant Panigrahi, Sasikanta Tripathy
This paper investigates how price dynamics of Bitcoin are affected not simply by endogenous factors of the cryptocurrency market, but also by exogenous ones related to the worlds of gold and oil. Empirical results based on statistical analysis (regression modeling, correlation matrix) show a significant positive, along with interesting, link between oil prices and Bitcoin, that reflects the influence of world energy markets, inflation, and liquidity on the value of Bitcoin. In the meantime, gold has a steady but minor effect, which indicates that Bitcoin is slowly integrating into normal stores of value, if it doesn't behave entirely like the shiny metal during times of economic stress. The results underscore the need to stop treating Bitcoin as a separate universe that is detached from the macro models. Predictive modelling calls for a bullish uptrend over 5 years for Bitcoin, with the usual caveat for future estimates. In general, this research adds to our new understanding of Bitcoin as an intermediate asset, both irrational (speculation) and rational (hedge), and motivates further attention on how this digital currency continues to interact with major commodities as it becomes more integrated in the world of global finance.
Antonio MartĂnez Raya, Alejandro Segura de la Cal, Javier Espina HellĂn
Since its launch in 2009, Bitcoin has become a market disruptor due to its primary function as a virtual currency supported by blockchain technology and the high volume of economic transactions it facilitates. This article examines the key theoretical principles that have contributed to Bitcoinâs recognition as a cryptocurrency. It assesses whether Bitcoin meets the criteria for being considered a form of money and evaluates its importance as a financial asset. This analysis of Bitcoin from 2014 to 2025 reveals that it does not sufficiently fulfill all the typical functions of money, such as serving as an internationally accepted means of payment, a unit of account, a securities depository, and a standard for deferred payments. Despite its usual close correlation with stock indices in financial markets, a decentralized digital currency like this still does not meet the requirements of fundamental analysis. In practice, this leads to its exclusion as a currency, since it does not fulfill the functions of money nor fully qualify as a crypto asset, as its value is primarily based on investorsâ expectations of high returns. Apart from a lack of foundation in tangible goods or services that justifies their value and dependence on new investors, the findings do not indicate conditions typical of a developed pyramidal model. Nevertheless, this does not prevent future technological innovations from responding positively to the functions of money or from offering real money services, especially those related to service innovation and the digital economy.
Stablecoins are crypto-assets designed to maintain a stable value against a reference asset, typically the U.S. Dollar. The peg to the dollar is supported by the assets that back the stablecoin. Stablecoins perform dollar-like functions in decentralized finance (DeFi) and represent a run-able liability for their issuers.
Bitcoin as a digital currency enables direct online transactions between parties, eliminating the requirement for traditional financial institutions. Opinions on Bitcoin vary, with some seeing it as a potential game-changer for finance, while others see it as a speculative asset that poses risks to global financial stability. However, the concept of e-currency is evolving and gaining traction, Bitcoin has become the most prominent and widely accepted form of online payment. Each Bitcoin is represented as a unique digital entry in a virtual wallet on a device, enabling users to send and receive bitcoins. Every bitcoin transaction is logged in a public list called the blockchain, allowing for transparent tracking of ownership and preventing unauthorized transactions. Bitcoins have value on their own, facilitating global transactions between parties without revealing your identity. Nations such as the US, Canada and Australia have established regulatory guidelines for Bitcoin, its legitimacy is limited to specific contexts and remains distinct from their official currencies. The objective of the current paper is to examine the long-term viability of Bitcoin and evaluate the likelihood of it being an internet bubble