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on Payment Systems and Financial Technology |
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Issue of 2024‒02‒19
24 papers chosen by |
| By: | Paul-Emmanuel Pichon (CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - UT3 - Université Toulouse III - Paul Sabatier - UT - Université de Toulouse - CNRS - Centre National de la Recherche Scientifique); Denis Bories (ISTHIA - Institut supérieur du tourisme, de l'hôtellerie et de l'alimentation (Toulouse) - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse); Christian Laborde |
| Abstract: | While players in the tourism sector have demonstrated a growing interest in cryptocurrencies, only 8% of French people declared having already invested in cryptocurrencies in 2021. This research focuses on the determinants of the adoption of new cryptocurrency technology in the case of hotel room reservations on online platforms offer payment in Bitcoin by adapting the UTAUT model. A quantitative study carried out with 189 respondents residing in France shows that perceived usefulness, ease of use and perceived risk are major determinants of the intention to use cryptocurrencies. More surprisingly, the attitude towards new technologies does not have a significant effect on the intention to adopt this means of payment. These results highlight consumer gaps in understanding cryptocurrencies and specifically blockchain, the infrastructure that should negate the usefulness of cryptocurrencies to consumers as well as reduce their perceived risk. This research shows that tourism stakeholders who wish to democratize the use of crypto-assets must set up awareness-raising actions with travelers by insisting on the usefulness and security provided by this technology. |
| Keywords: | Consumer behavior Crypto-currency Blockchain Technology adoption, Consumer behavior, Crypto-currency, Blockchain, Technology adoption |
| Date: | 2023–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04398288&r=pay |
| By: | Assen Slim (CREE EA 4513 - Centre de recherches Europes-Eurasie - Inalco - Institut National des Langues et Civilisations Orientales, CESSMA UMRD 245 - Centre d'études en sciences sociales sur les mondes africains, américains et asiatiques - IRD - Institut de Recherche pour le Développement - Inalco - Institut National des Langues et Civilisations Orientales - UPCité - Université Paris Cité) |
| Abstract: | In einem internationalen Kontext, in dem die Blockchain-Technologie zunehmend an Attraktivität gewinnt, wurden zahlreiche Projekte für digitale Zentralbankwährungen (MDBC) ins Leben gerufen. Das von der ukrainischen Zentralbank (NBU) initiierte e-hryvnia-CBDM-Projekt ist eines der am weitesten fortgeschrittenen in Europa. Nach einer Definition des Begriffs MDBC gibt dieser Artikel einen Überblick über die Erwartungen der NBU, die Ergebnisse des 2018 gestarteten Pilotprojekts MDBC e-hryvnia und die noch zu beseitigenden Hindernisse für die endgültige Einführung dieser Zentralbankwährung der neuen Generation. |
| Abstract: | In an international context marked by a growing attraction for blockchain technology, many central bank digital currency (CBD) projects have emerged. The e-Hryvnia CBDC project initiated by the National Bank of Ukraine (NBU) is one of the most advanced in Europe. After defining the concept of CBDC, this article reviews the NBU's expectations, the findings of the CBDC e-hryvnia pilot project launched in 2018, and the hurdles to be cleared to launch this new generation of central bank currency. |
| Abstract: | La MDBC e-hryvnia : une monnaie banque centrale en projet Dans un contexte international marqué par un attrait croissant pour la technologie blockchain, de nombreux projets de monnaies digitales de banques centrales (MDBC) ont vu le jour. Le projet de MDBC e-hryvnia engagé par la banque centrale d'Ukraine (NBU) est l'un des plus avancés d'Europe. Après avoir défini la notion de MDBC, cet article fait le point sur les attentes de la NBU, les conclusions du projet pilote de MDBC e-hryvnia lancé en 2018 et les obstacles qui restent à lever pour lancer définitivement cette monnaie banque centrale de nouvelle génération. |
| Keywords: | Central bank digital currency, CDBC, e-hryvnya, Ukraine, National Bank of Ukraine, Monnaie digitale de banque centrale, MDBC, e-hryvnia, Banque nationale d'Ukraine |
| Date: | 2022–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03937410&r=pay |
| By: | Roberto Rivera; Guido Rocco; Massimiliano Marzo; Enrico Talin |
| Abstract: | This whitepaper introduces RIVCoin, a cryptocurrency built on Cosmos, fully stabilized by a diversified portfolio of both CeFi and DeFi assets, available in a digital, non-custodial wallet called RIV Wallet, that aims to provide Users an easy way to access the cryptocurrency markets, compliant to the strictest AML laws and regulations up to date. The token is a cryptocurrency at any time stabilized by a basket of assets: reserves are invested in a portfolio composed long term by 50% of CeFi assets, comprised of Fixed Income, Equity, Mutual and Hedge Funds and 50% of diversified strategies focused on digital assets, mainly staking and LP farming on the major, battle tested DeFi protocols. The cryptocurrency, as well as the dollar before Bretton Woods, is always fully stabilized by vaulted proof of assets: it is born and managed as a decentralized token, minted by a Decentralized Autonomous Organization, and entirely stabilized by assets evaluated by professional independent third parties. Users will trade, pool, and exchange the token without any intermediary, being able to merge them into a Liquidity Pool whose rewards will be composed by both the trading fees and the liquidity rewards derived from the reserve's seigniorage. Users who wish and decide to pool RIVCoin in the Liquidity Pool will receive additional RIVCoin for themselves, and new RIVCoin are minted when the reserves increase in value or in case of purchase of new RIVCoin. The proposed model allows for alignment of incentives: decreasing the risk exposure by wealthier Users, but implicitly increasing that of smaller ones to a level perceived by them as still sustainable. Users indirectly benefit from the access to the rewards of sophisticated cryptocurrency portfolios hitherto precluded to them, without this turning into a disadvantage for the wealthy User. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.05393&r=pay |
| By: | Fiona M. Scott Morton |
| Abstract: | The DMA raises tantalising opportunities for app stores innovation, making it the most exciting area of digital regulation. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:node_9690&r=pay |
| By: | Vladimir Skavysh; Jacob Sharples; Sofia Priazhkina; Salman H. Hasham |
| Abstract: | Centralized trading platforms, or exchanges, are playing an increasingly important role in expanding the global crypto ecosystem. In contrast with their counterparts in traditional financial markets, these exchanges are vertically integrated and solely responsible for the execution, clearing and settlement of transactions. Moreover, exchanges often act as the custodian of users’ assets, which exacerbates the risk borne by its users. In this note, we provide an introduction to the functions that cryptoasset exchanges typically perform and contrast their design with infrastructure used in traditional financial markets. We also discuss several emerging trends in regulation and financial innovation that help address the problems cryptoasset exchanges face. |
| Keywords: | Digital currencies and fintech; Payment clearing and settlement systems |
| JEL: | G15 L1 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocsan:24-2&r=pay |
| By: | Mounir Dahmani (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, UGAF - Université de Gafsa - Sidi Ahmed Zarroug); Adel Ben Youssef (UCA - Université Côte d'Azur) |
| Abstract: | The platform economy has emerged as a transformative force in various industries, reshaping consumer behavior and the way businesses operate in the digital age. Understanding the factors that influence the adoption of these platforms is essential for their continued development and widespread use. This study examines the determinants of economic platform adoption in Tunisia by extending the widely used unified theory of acceptance and use of technology 2 (UTAUT2) model with a privacy calculus model. By applying the partial least squares structural equation modeling (PLS-SEM) technique, the research provides significant insight. The results highlight the critical influence of factors such as performance expectancy, habit formation, trust in technology, perceived risk, privacy concerns, and price value on users' behavioral intentions and actual usage of the platforms. These findings provide a deeper understanding of the dynamics surrounding the adoption of the platform economy in developing countries and offer valuable insight for stakeholders. By leveraging this knowledge, stakeholders can foster an inclusive digital ecosystem, drive economic growth, and create an environment conducive to the widespread adoption and use of the platform economy in developing countries. |
| Keywords: | economic platforms, user behavior, UTAUT2 model, privacy calculus model, PLS-SEM, Tunisia |
| Date: | 2023–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04374239&r=pay |
| By: | Marcel Bluhm (The Block); Adrian Cachinero Vasiljevi\'c (Steakhouse Financial Limited); S\'ebastien Derivaux (Steakhouse Financial Limited); S{\o}ren Terp H{\o}rl\"uck Jessen (Balloonist ApS) |
| Abstract: | Stablecoins have turned out to be the "killer" use case of the growing digital asset space. However, risk management frameworks, including regulatory ones, have been largely absent. In this paper, we address the critical question of measuring and managing risk in stablecoin protocols, which operate on public blockchain infrastructure. The on-chain environment makes it possible to monitor risk and automate its management via transparent smart-contracts in real-time. We propose two risk metrics covering capitalization and liquidity of stablecoin protocols. We then explore in a case-study type analysis how our risk management framework can be applied to DAI, the biggest decentralized stablecoin by market capitalisation to-date, governed by MakerDAO. Based on our findings, we recommend that the protocol explores implementing automatic capital buffer adjustments and dynamic maturity gap matching. Our analysis demonstrates the practical benefits for scalable (prudential) risk management stemming from real-time availability of high-quality, granular, tamper-resistant on-chain data in the digital asset space. We name this approach Crypto Asset-Liability Management (CALM). |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.13399&r=pay |
| By: | Adel Ben Youssef (UCA - Université Côte d'Azur); Mounir Dahmani (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, UGAF - Université de Gafsa - Sidi Ahmed Zarroug) |
| Abstract: | In the context of an increasingly digitized global marketplace, this study seeks to shed light on its adoption in developing countries, focusing on Morocco. Applying logit, probit, and conditional mixed-process probit models to a sample of 807 Moroccan firms, we identify key factors that influence e-commerce adoption. The results show that younger, innovation-driven firms and those with a highly educated workforce tend to adopt e-commerce more readily. However, digital skills required in hiring do not significantly affect adoption, suggesting a complex relationship between digital skills and e-commerce use. The results also show that firms that are active on digital platforms and engage in innovative practices are more likely to adopt e-commerce. Therefore, this study argues for the need to improve digital skills training and for firms to establish a presence on digital platforms and promote innovation. On the policy front, the study suggests the promotion of supportive policies such as financial assistance, improved Internet infrastructure, and robust regulatory frameworks. As an important starting point for future research, these findings underscore the complexities of e-commerce adoption in Morocco and can guide further research, particularly in the context of similar emerging economies. |
| Keywords: | technology adoption, e-commerce, facilitating conditions, qualitative, Moroccan firms, logit, probit, conditional mixed process-probit model |
| Date: | 2023–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04374231&r=pay |
| By: | Jorge Abad (Banco de España); Galo Nuño (Bank for International Settlements); Carlos Thomas (Banco de España) |
| Abstract: | We analyse the impact of introducing a central bank-issued digital currency (CBDC) on the operational framework of monetary policy and the macroeconomy as a whole. To this end, we develop a New Keynesian model with heterogeneous banks, a frictional interbank market, a central bank with deposit and lending facilities, and household preferences for different liquid assets. The model is calibrated to replicate the main monetary and financial aggregates in the euro area. Our analysis predicts that CBDC adoption implies a roughly equivalent reduction in banks’ deposit funding. However, this ‘deposit crunch’ has a rather small effect on bank lending to the real economy, and hence on aggregate investment and GDP. This result reflects the parallel impact of a CBDC on a central bank’s operational framework. For relatively moderate CBDC adoption levels, the reduction in deposits is absorbed by an almost one-to-one fall in reserves at the central bank, implying a transition from a ‘floor’ system – with ample reserves – to a ‘corridor’ system. For larger CBDC adoption, the loss of bank deposits is compensated by increased recourse to central bank credit, as the corridor system gives way to a ‘ceiling’ system with scarce reserves. |
| Keywords: | central bank digital currency (CBDC), interbank market, search and matching frictions, excess reserves |
| JEL: | E42 E44 E52 G21 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2404&r=pay |
| By: | Samuel Vandak; Geoffrey Goodell |
| Abstract: | The landscape of payment methods in retail is a complex and evolving area. Vendors are motivated to conduct an appropriate analysis to decide what payment methods to accept out of a vast range of options. Many factors are included in this decision process, some qualitative and some quantitative. The following research project investigates vendors' acceptance of cards and cash from various viewpoints, all chosen to represent a novel perspective, including the barriers and preferences for each and correlations with external demographic factors. We observe that lower interchange fees, limited in this instance by the regulatory framework, play a crucial role in facilitating merchants' acceptance of card payments. The regulatory constraints on interchange fees create a favorable cost structure for merchants, making card payment adoption financially feasible. However, additional factors like technological readiness and consumer preferences might also play a significant role in their decision-making process. We also note that aggregate Merchant Service Providers (MSPs) have positively impacted the payment landscape by offering more competitive fee rates, particularly beneficial for small merchants and entrepreneurs. However, associated risks, such as account freezes or abrupt terminations, pose challenges and often lack transparency. Last, the quantitative analysis of the relationship between demographic variables and acceptance of payment types is presented. This analysis combines the current landscape of payment acceptance in the UK with data from the most recent census from 2021. We show that the unemployment rates shape card and cash acceptance, age affects contactless preference, and work-from-home impacts credit card preference. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.07682&r=pay |
| By: | Jose Aurazo |
| Abstract: | Sub-acquirers, also known as payment facilitators, have played a vital role in fostering merchant digital payments acceptance, particularly in developing countries. To provide access to digital payments (ie card acceptance) to merchants, sub-acquirers do not have a direct connection with the card network but through the acquirer. This paper aims to study the optimal pricing in the payments industry when: i) the sub-acquirers and acquirers compete in the same downstream market, and ii) the sub-acquirers enter niche markets that are not covered yet (eg micro and small-sized merchants). In the first scenario, a conflict arises as the acquirer might have incentives to deter entry by charging prohibitive access fees. In the second scenario, the acquirer obtains an extra profit from granting access to the card network for the sub-acquirers, and welfare increases. That said, the regulator can play a relevant role in the first scenario by setting an access fee to allow socially but not privately desirable entry. |
| Keywords: | access pricing, interchange fees, payment cards, payment facilitators, two-sided markets |
| JEL: | G21 L11 L4 L5 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1163&r=pay |
| By: | Christopher Henry; Doina Rusu; Matthew Shimoda |
| Abstract: | We present results from the 2022 Methods-of-Payment Survey, including updated payment shares based on a three-day shopping diary. We highlight long-term trends in cash holdings, management and use observed across results from previous surveys in 2009, 2013 and 2017. We also review recent trends relating to the COVID-19 pandemic using data from 2020 and 2021. We assess various factors associated with long-term trends in cash use. |
| Keywords: | Bank notes; Coronavirus disease (COVID-19); Digital currencies and fintech; Financial services |
| JEL: | D83 E41 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:24-01&r=pay |
| By: | James A. Clouse |
| Abstract: | This paper develops an analytical framework aimed at shedding light on the implications of the evolution of financial market structure for monetary policy implementation and transmission. The basic model builds on that developed in Chen et. al. (2014) which, in turn, draws inspiration from the pioneering work of Tobin (1969) and Gurley and Shaw (1960). The paper focuses, in particular, on the implications of introducing new types of fixed-rate financial assets in the financial system including retail and wholesale central bank digital currency (CBDC), stablecoins issued by narrow nonbanks, and deposits issued by narrow banks. The analysis also provides a crude way of capturing some of the effects of bank capital and liquidity regulation on financial intermediation and monetary policy implementation. Perhaps the most important conclusion is that the introduction of new fixed-rate assets by the Federal Reserve or by other financial intermediaries can have significant effects on equilibrium interest rates and patterns of financial intermediation and may also affect the potency of monetary policy tools. These effects are most pronounced when new financial assets are close substitutes for existing financial assets. |
| Keywords: | Bank Regulation; Financial Innovation; Monetary Policy Implementation; Monetary policy |
| JEL: | E40 E42 E43 E44 E50 E52 |
| Date: | 2024–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2024-01&r=pay |
| By: | Jin, Keyan; Zhong, Ziqi; Zhao, Elena Yifei |
| Abstract: | Digital marketing refers to the process of promoting, selling, and delivering products or services through online platforms and channels using the internet and electronic devices in a digital environment. Its aim is to attract and engage target audiences through various strategies and methods, driving brand promotion and sales growth. The primary objective of this scholarly study is to seamlessly integrate advanced big data analytics and artificial intelligence (AI) technology into the realm of digital marketing, thereby fostering the progression and optimization of sustainable digital marketing practices. First, the characteristics and applications of big data involving vast, diverse, and complex datasets are analyzed. Understanding their attributes and scope of application is essential. Subsequently, a comprehensive investigation into AI-driven learning mechanisms is conducted, culminating in the development of an AI random forest model (RFM) tailored for sustainable digital marketing. Subsequent to this, leveraging a real-world case study involving enterprise X, fundamental customer data is collected and subjected to meticulous analysis. The RFM model, ingeniously crafted in this study, is then deployed to prognosticate the anticipated count of prospective customers for said enterprise. The empirical findings spotlight a pronounced prevalence of university-affiliated individuals across diverse age cohorts. In terms of occupational distribution within the customer base, the categories of workers and educators emerge as dominant, constituting 41% and 31% of the demographic, respectively. Furthermore, the price distribution of patrons exhibits a skewed pattern, whereby the price bracket of 0–150 encompasses 17% of the population, whereas the range of 150–300 captures a notable 52%. These delineated price bands collectively constitute a substantial proportion, whereas the range exceeding 450 embodies a minority, accounting for less than 20%. Notably, the RFM model devised in this scholarly endeavor demonstrates a remarkable proficiency in accurately projecting forthcoming passenger volumes over a seven-day horizon, significantly surpassing the predictive capability of logistic regression. Evidently, the AI-driven RFM model proffered herein excels in the precise anticipation of target customer counts, thereby furnishing a pragmatic foundation for the intelligent evolution of sustainable digital marketing strategies, |
| Keywords: | artificial intelligence (AI); big data; random forest model (RFM); social media; sustainable digital marketing; technological innovation; AAM requested |
| JEL: | L81 |
| Date: | 2024–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121402&r=pay |
| By: | Jiang, Jennifer; Alizadeh, Armin; Adam, Martin; Wiener, Martin; Benlian, Alexander |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:141940&r=pay |
| By: | Virginie Terraza (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier); Aslı Boru İpek; Mohammad Mahdi Rounaghi |
| Abstract: | The spread of the coronavirus has reduced the value of stock indexes, depressed energy and metals commodities prices including oil, and caused instability in financial markets around the world. Due to this situation, investors should consider investing in more secure assets, such as real estate property, cash, gold, and crypto assets. In recent years, among secure assets, cryptoassets are gaining more attention than traditional investments. This study compares the Bitcoin market, the gold market, and American stock indexes (S&P500, Nasdaq, and Dow Jones) before and during the COVID-19 pandemic. For this purpose, the dynamic conditional correlation exponential generalized autoregressive conditional heteroskedasticity model was used to estimate the DCC coefficient and compare this model with the artificial neural network approach to predict volatility of these markets. Our empirical findings showed a substantial dynamic conditional correlation between Bitcoin, gold, and stock markets. In particular, we observed that Bitcoin offered better diversification opportunities to reduce risks in key stock markets during the COVID-19 period. This paper provides practical impacts on risk management and portfolio diversification. |
| Keywords: | JEL Classification: C22 C58 G17 Bitcoin market Gold market American stock markets COVID-19 pandemic VAR-DCC-EGARCH model ANN model, JEL Classification: C22, C58, G17 Bitcoin market, Gold market, American stock markets, COVID-19 pandemic, VAR-DCC-EGARCH model, ANN model |
| Date: | 2024–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04395168&r=pay |
| By: | Genakos, Christos; Roumanias, Costas; Valletti, Tommaso |
| Abstract: | We present novel evidence from a large panel of UK consumers who receive personalized reminders from a specialist price-comparison website about the precise amount they could save by switching to their best-suited alternative mobile telephony plan. We document three phenomena. First, even self-registered consumers with positive savings exhibit inertia. Second, we show that being informed about potential savings has a positive and significant effect on switching. Third, controlling for savings, the effect of incurring overage payments is significant and similar in magnitude to the effect of savings: paying an amount that exceeds the recurrent monthly fee weighs more on the switching decision than being informed that one can save that same amount by switching to a less inclusive plan. We interpret this asymmetric reaction on switching behavior as potential evidence of loss aversion. In other words, when facing complex and recurrent tariff plan choices, consumers care about savings but also seem to be willing to pay upfront fees in order to get "peace of mind". |
| Keywords: | tariff/plan choice; inertia; switching; loss aversion; mobile telephony |
| JEL: | D91 D12 D81 L96 M30 |
| Date: | 2023–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121294&r=pay |
| By: | Prince HIKOUATCHA (University of Dschang, Dschang, Cameroon); Alain G. TAGNE FOKA (University of Dschang, Dschang, Cameroon); Armand D. FOSSI (University of Dschang, Dschang, Cameroon); Simplice A ASONGU (Johannesburg, South Africa) |
| Abstract: | Recent and ongoing advancements in the field of ICT have led to the introduction of increasingly diversified financial products, and their use is improving people's level of financial knowledge and skills. This article aims at assessing the effect of Fintech on the level of financial literacy of small business’ managers in Cameroon. To this end, information was gathered using a questionnaire from 209 small business managers in Cameroon. Descriptive statistics, Principal Component Analysis (PCA), and multiple linear regression are used. Results lead to two main conclusions. On the one hand, unlike knowledge of their existence, the frequency of use of Fintech tools is better able to contribute to improving financial literacy levels overall. On the other hand, specifically, this result is more important when it comes to competence and self-confidence in managing financial affairs. As a result, increasing the utilization of financial technology instruments in companies is imperative for efficiency. |
| Keywords: | Financial Skill; Financial Knowledge; Financial literacy; Fintech; Small business |
| JEL: | G53 M2 O33 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:23/070&r=pay |
| By: | Zineb Aouni; Marek Hudon; Anaïs A Périlleux; Tyler Wry |
| Date: | 2024–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/367191&r=pay |
| By: | Drott, Constantin; Goldbach, Stefan; Nitsch, Volker |
| Abstract: | This paper examines the effect of financial sanctions at the most disaggregated level possible, individual bank accounts. Using data from the Eurosystem’s real-time gross settlement system TARGET2, we provide empirical evidence that sanctions imposed by the European Union on Russian banks following Russia’s aggression against Ukraine in 2014 and 2022 have sizably reduced financial transactions with sanctioned Russian bank accounts, both along the extensive and intensive margins. Among the various sanction measures taken, exclusion from SWIFT, a global provider of secure financial messaging services, turns out to have the largest effects. |
| Date: | 2024–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:142468&r=pay |
| By: | Rashad Ahmed; Iñaki Aldasoro; Chanelle Duley |
| Abstract: | We provide a global games framework to study how the promise of par convertibility by various types of stablecoins breaks down. Public information disclosure has an ambiguous effect on run risk: greater transparency can lead to increased (reduced) run risk for sufficiently low (high) stablecoin holders' priors about reserve quality or transaction costs of conversion to fiat. If the distribution of reserve assets is fat-tailed (i.e. reserves are volatile), par convertibility is resilient to small shocks but fails with large negative public shocks, even for high initial reserve values. We find empirical support for the testable implications of the model. |
| Keywords: | stablecoins, crypto, global games, bank runs |
| JEL: | C70 D83 D84 E42 G01 G20 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1164&r=pay |
| By: | Mayer, J. H.; Lischke, Linus; Quick, Reiner; Kalden, Friedrich |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:141928&r=pay |
| By: | Maria A. Maricheva (National Research University Higher School of Economics); Vadim A. Petrovsky (National Research University Higher School of Economics) |
| Abstract: | This work is devoted to the subjective value of money as a condition for the free choice of a person in the market for goods and services. Starting from the understanding of money as the universal equivalent of value, this paper emphasises the idea that money not only expresses (“measures”) value, but also represents a materialised possibility of having free choice of any commodity for a given value. It is assumed that the unfettered and multivariable nature of possible exchanges inherent in money has a special value for its holder. Thus, the hypothesis is formulated that money, as an embodiment of freedom of choice, symbolises something more than just the value of goods that can be purchased with that money. We refer to the hypothetical difference between the subjective value of money and the average price of goods that can be purchased with it as the "surplus value of money ( -«Delta»)". This phenomenon is experimentally fixed on the basis of the “Money - Commodity - Delta” methodology jointly developed by the authors. As such, in this work, the value of money as an instrument of free choice has been measured for the first time. Four groups of respondents were also identified according to their resolution of the "commodity or money" dilemma. The analysis of possible determinants of the surplus value of money may become a topic for further research. |
| Keywords: | money, psychological characteristics of money, freedom of choice |
| JEL: | Z |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:139psy2024&r=pay |
| By: | Kai Arvai; Nuno Coimbra |
| Abstract: | How does a country obtain the status of a safe haven with a dominant global currency? This paper argues that size matters: as a country becomes larger and more diversified, the underlying shock process of the economy becomes less variable. Shocks that can drive a government to default become less likely, implying lower default probability, lower interest rates and higher debt-to-GDP. Furthermore, the larger a country’s share in the supply of global safe assets, the more liquid and attractive its bonds are for investors. If the dominant currency country grows less than the rest of the world, its status as a safe haven erodes and interest rate differentials decline. This could explain the recent evidence of shrinking US return differentials on its cross-border bond portfolios. |
| Keywords: | Dominant Currency, Safe Assets, US Dollar, Default |
| JEL: | E42 F02 F33 N10 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:932&r=pay |