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on Payment Systems and Financial Technology |
| By: | Parma Bains |
| Abstract: | Consensus mechanisms underpin the effective operation of blockchains by ensuring a single consistent and honest ledger. The design and implementation of these consensus mechanisms can improve or impede the ability of regulatory and supervisory authorities to achieve their objectives and mandates. This paper provides an update to the Fintech Note Blockchain Consensus Mechanisms: A Primer for Supervisors (2022) by reviewing the growth of existing consensus mechanisms, exploring new consensus mechanisms, and the development of layer 2 protocols. It is a non-technical and accessible note to provide supervisors a broad understanding of the technology within their remits. |
| Keywords: | Distributed ledger technology; dlt; blockchain; consensus; fintech; supervision; layer2; crypto; digital; bitcoin; ethereum; solana |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/186 |
| By: | David Argente; Paula Gonzalez Alvarez; Esteban Méndez; Diana Van Patten |
| Abstract: | Digital payment platforms can displace cash and extend financial services to underserved populations, yet many adults worldwide remain unbanked. Leveraging granular microdata on individual transactions and user characteristics, we argue that broad cash substitution via peer-to-peer (P2P) platforms depends on a “rapid low income-gradient”, the speed at which adoption spreads from affluent early users to lower-income groups. In three Latin American cases, Brazil’s Pix, Costa Rica’s Sinpe Móvil, and Mexico’s CoDi, we document that low adoption costs, strong network effects, coordinated supply-side integration, and early awareness efforts enabled Pix and Sinpe Móvil to reach nearly all income segments within five years, whereas CoDi remains characterized by low usage and predominantly high-income adopters. |
| JEL: | E4 E5 O10 O2 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34280 |
| By: | Maryam Baroudi (UIT - Université Ibn Tofaïl); Laila Bennis (UIT - Université Ibn Tofaïl) |
| Abstract: | Amid the ongoing digital transformation, blockchain technology has emerged as a key innovation in the financial sector. One of its most promising applications is asset tokenization, which enables the digital representation and fractional ownership of financial assets. This study explores how the blockchain and asset tokenization can enhance the Asset-Backed Securitization process. In our research, we conduct a comprehensive literature review and present a case study highlighting the adoption of blockchain technology in financial institutions for securitization purposes. Based on these insights, we propose an ABS to incorporate blockchain and tokenization into the securitization process by increasing transparency, operational efficiency, and acceptability for investors. Our findings show that this technological approach can significantly enhance the performance of ABS by reducing operational risks, improving data integrity, and promotes boarder investor participation through fractionalization. It contributes to a more resilient and inclusive financial system. |
| Keywords: | O31 Paper type: Theoretical Research, O16, securitization. JEL Classification: G10, tokenization, Blockchain, Blockchain tokenization securitization. JEL Classification: G10 O16 O31 Paper type: Theoretical Research |
| Date: | 2025–08–17 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05222571 |
| By: | Wagner, Julia; de Brauw, Alan; Bloem, Jeffrey R.; Ambler, Kate |
| Abstract: | Agriculture remains the backbone of rural economies across much of both Sub-Saharan Africa and South and Southeast Asia, employing 54 and 43 percent of the workforce, respectively, and providing livelihoods for most of the rural poor (GSMA, 2020; Nair and Varghese, 2020). Yet, financial transactions in agri-food value chains continue to rely overwhelmingly on cash. The 2021 Global Findex survey finds that most adults in low- and middle-income countries who were paid for agricultural products received their payment in cash. On average, one in four recipients, and fewer than one in six in Sub-Saharan Africa, received agricultural payments into an account (Nair and Varghese, 2020; Demirgüç-Kunt et al., 2022). This reliance on cash introduces a range of inefficiencies and risks, including high transaction costs, security vulnerabilities, lack of transparency, and exclusion from formal financial services (BTCA, 2023a). Digitalizing agricultural payments offers a promising solution to these challenges. Digital financial ser vices (DFS) for the agriculture sector, including mobile money, e-wallets, digital banking, digital credit, savings products, insurance, and e-commerce solutions tailored to agricultural value chains, can facilitate safer, faster, and more transparent transactions while simultaneously connecting farmers and intermediary actors to broader financial ecosystems (GSMA, 2020). By digitalizing payments, farmers can build verifiable financial histories that enable access to formal credit and insurance markets, manage income more effectively, and reduce the risks associated with cash handling. For agribusinesses, digital payments offer substantial operational efficiencies: they lower cash handling costs, improve procurement transparency, support traceability initiatives crucial for compliance with international sustainability standards, and enhance supplier loyalty through faster and more reliable payment processes (Beaman et al., 2014; Nair and Varghese, 2020; BTCA, 2023a). |
| Keywords: | agriculture; value chains; digital technology; rural economics; finance |
| Date: | 2025–07–14 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprwp:175632 |
| By: | Marita Freimane |
| Abstract: | In response to growing platform market power, governments seek ways to strengthen the bargaining position of content providers and other suppliers of platforms. Due to information asymmetries between platforms and regulators, top-down interventions— such as mandated transaction prices— are difficult to implement. This paper examines the effects of a bottom-up, bargaining-based regulatory alternative: Australia’s News Media and Digital Platforms Mandatory Bargaining Code. The Code mandates that platforms negotiate payments for content with domestic publishers, backed by final-offer arbitration. Using a difference-in-differences design and granular data from Google News, I show that the Code significantly altered the composition of news content. In particular, the share of content from large foreign publishers increased, while that of major domestic publishers declined—consistent with changes in the relative cost of displaying different types of content. |
| Keywords: | platform regulation, news aggregators, bargaining power, news media |
| Date: | 2025–09–15 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:772000 |
| By: | Alberto Maria Mongardini; Alessandro Mei |
| Abstract: | From viral jokes to a billion-dollar phenomenon, meme coins have become one of the most popular segments in cryptocurrency markets. Unlike utility-focused crypto assets like Bitcoin or Ethereum, meme coins derive value primarily from community sentiment, making them vulnerable to manipulation. This study presents a cross-chain analysis of the meme coin ecosystem, examining 34, 988 tokens across Ethereum, BNB Smart Chain, Solana, and Base. We characterize the tokenomics of meme coins and track their growth in a three-month longitudinal analysis. We discover that among high-return tokens (>100%), an alarming 82.6% show evidence of extensive use of artificial growth strategies designed to create a misleading appearance of market interest. These include wash trading and a form of manipulation we define as Liquidity Pool-Based Price Inflation (LPI), where small strategic purchases trigger dramatic price increases. We also find evidence of schemes designed to profit at the expense of investors, such as pump and dumps and rug pulls. In particular, most of the tokens involved had previously experienced wash trading or LPI, indicating how initial manipulations often set the stage for later exploitation. These findings reveal that manipulations are widespread among high-performing meme coins and suggest that their dramatic gains are often likely driven by coordinated efforts rather than natural market dynamics. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.01963 |
| By: | Julius Mattern; Christoph Meyer |
| Abstract: | As modern economies increasingly adopt digital and instant payments, ensuring the resilience of payment systems and maintaining public trust have become more critical. This paper extends the network and clustering approach of Glowka et al. (2025) to identify critical participants in real-time gross settlement (RTGS) systems - those whose failure could disrupt system continuity. Our extension incorporates three key dimensions: payment type (interbank vs. customer), intrayear temporal frequency, and transaction view (value vs. volume). With these dimensions, we derive an extensive set of granular criticality scenarios and weight each scenario result by its economic activity to reflect its operational relevance. Applying this method to transaction data from SIC, Switzerland's RTGS system, we find that, beyond large international banks, mid-sized domestic banks and, occasionally, financial market infrastructures also play critical roles, especially during periods of heightened economic activity and night-time settlement hours. These criticality results are consistent, although some participants feature more prominently in the volume-based view. Our findings provide system operators and regulators with complementary tools to meet the Principles for Financial Market Infrastructures (PFMI), enabling context-specific assessment of criticality in RTGS systems and informing realistic stress test scenarios amid a rapidly evolving payment landscape. |
| Keywords: | Payment system, Systemic risk, Settlement, Central bank, Customer payments |
| JEL: | E42 D62 E44 E58 G21 J33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:snb:snbwpa:2025-14 |
| By: | Fedor Shabashev |
| Abstract: | Prediction markets have gained adoption as on-chain mechanisms for aggregating information, with platforms such as Polymarket demonstrating demand for stablecoin-denominated markets. However, denominating in non-interest-bearing stablecoins introduces inefficiencies: participants face opportunity costs relative to the fiat risk-free rate, and Bitcoin holders in particular lose exposure to BTC appreciation when converting into stablecoins. This paper explores the case for prediction markets denominated in Bitcoin, treating BTC as a deflationary settlement asset analogous to gold under the classical gold standard. We analyse three methods of supplying liquidity to a newly created BTC-denominated prediction market: cross-market making against existing stablecoin venues, automated market making, and DeFi-based redirection of user trades. For each approach we evaluate execution mechanics, risks (slippage, exchange-rate risk, and liquidation risk), and capital efficiency. Our analysis shows that cross-market making provides the most user-friendly risk profile, though it requires active professional makers or platform-subsidised liquidity. DeFi redirection offers rapid bootstrapping and reuse of existing USDC liquidity, but exposes users to liquidation thresholds and exchange-rate volatility, reducing capital efficiency. Automated market making is simple to deploy but capital-inefficient and exposes liquidity providers to permanent loss. The results suggest that BTC-denominated prediction markets are feasible, but their success depends critically on the choice of liquidity provisioning mechanism and the trade-off between user safety and deployment convenience. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.11990 |
| By: | Mr. Itai Agur; Alexander Copestake |
| Abstract: | Competing broker initiatives to “tokenize” financial assets—i.e., represent them on programmable platforms—promise efficiency gains but raise concerns about market fragmentation. Policymakers in several countries are considering supporting such platforms or mandating their interoperability. We provide the first formal framework for analyzing optimal policy in this context. Brokers with heterogeneous market power compete to attract investors and execute their trades intra-broker or on a legacy platform. Coalitions of brokers can invest in creating a tokenized market with faster, cheaper inter-broker settlement. Partial coalitions divert trades away from excluded competitors, leading to equilibrium coalition structures that can feature excessive investment or insufficient tokenization. Neither public-private cost-sharing nor interoperability mandates are sufficient to achieve the social optimum when used alone, but their combination is. These results withstand incorporating an open-access ledger (e.g., a public blockchain). |
| Keywords: | Tokenization; Interoperability; Intermediation; Trading platforms; Coali-tion formation. |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/185 |
| By: | S. Gokula Krishnan (SEI - Surana College, Kengeri Campus, Bengaluru); S. Keerthi (SEI - Surana College, Kengeri Campus, Bengaluru); S. Jyothi (SEI - Surana College, Kengeri Campus, Bengaluru) |
| Abstract: | This article aimed to analyse awareness level, frequency of usage, ease of usage about the selected Mobile Healthcare Apps and examined impact of Service Quality of mHealthcare Apps, Satisfaction level of mHealthcare Apps, and Price level on Trustworthiness of mHealthcare Apps. This comparative research has surveyed 111 users of mobile Healthcare Apps in Bengaluru, India using structured questionnaire. The sampling techniques adopted are snowball sampling technique. The collected data analysed using Descriptive Analysis, Weighted Rank Method, Comparative Analysis, Correlation and Simple Linear Regression Analysis. Key findings reveal Apollo 24/7 as the frontrunner in terms of brand awareness and perceived ease of use. Service quality emerged as a primary determinant of trustworthiness, surpassing price value. The developed regression model effectively explains a significant portion of the variance in trustworthiness. These insights are particularly relevant for managers and developers of mHealth apps, as they emphasize the importance of maintaining high service quality to build and sustain trust among users. These findings underscore the importance of service quality in fostering trust among users of mobile healthcare apps. While the study provides valuable insights into consumer perceptions and behaviors, its reliance on snowball sampling necessitates cautious interpretation of results. The use of snowball sampling introduces potential selection bias, and the relatively small sample size restricts the generalizability of the findings. Future research could expand on this study by conducting comparative analyses across different regions to explore how cultural differences influence trust in mHealth apps. Additionally, qualitative studies could provide deeper insights into user experiences and the underlying factors that drive trust or distrust in these applications. |
| Keywords: | Trustworthiness, Satisfaction, Price Value, Service Quality, Ease of Use, Usage, Awareness, Mobile Health Apps |
| Date: | 2025–08–27 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05227641 |
| By: | Agarwal, Sumit; Choudhury, Smarajit Paul; Fan, Mingxuan; Klapper, Leora |
| Abstract: | This paper quantifies the short-run economic impact of 21 Atlantic hurricanes on U.S. local business activity from 2017 to 2024 using anonymized Mastercard transaction data aggregated by ZIP code. On average, hurricanes reduce merchant sales by 12.4 percent during the preparation, impact, and recovery phases—an estimated US$1.38 billion in lost revenue per storm. Substitution in spending across nearby areas or large online platforms is limited, indicating widespread local consumption declines. Economic disruption varies more by industry than storm intensity, with independent stores hit harder than chains. Local businesses with larger online presence face smaller, shorter sales declines, showing greater resilience. |
| Date: | 2025–09–22 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11217 |
| By: | Runhuan Feng; Hong Li; Ming Liu |
| Abstract: | Artificial intelligence (AI) is transforming financial planning by expanding access, lowering costs, and enabling dynamic, data-driven advice. Yet without clear safeguards, digital platforms risk reproducing longstanding market inefficiencies such as information asymmetry, misaligned incentives, and systemic fragility. This paper develops a framework for responsible AI in financial planning, anchored in five principles: fiduciary duty, adaptive personalization, technical robustness, ethical and fairness constraints, and auditability. We illustrate these risks and opportunities through case studies, and extend the framework into a five-level roadmap of AI financial intermediaries. By linking technological design to economic theory, we show how AI can either amplify vulnerabilities or create more resilient, trustworthy forms of financial intermediation. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.09922 |
| By: | Aaron Chatterji; Thomas Cunningham; David J. Deming; Zoe Hitzig; Christopher Ong; Carl Yan Shan; Kevin Wadman |
| Abstract: | Despite the rapid adoption of LLM chatbots, little is known about how they are used. We document the growth of ChatGPT’s consumer product from its launch in November 2022 through July 2025, when it had been adopted by around 10% of the world’s adult population. Early adopters were disproportionately male but the gender gap has narrowed dramatically, and we find higher growth rates in lower-income countries. Using a privacy-preserving automated pipeline, we classify usage patterns within a representative sample of ChatGPT conversations. We find steady growth in work-related messages but even faster growth in non-work-related messages, which have grown from 53% to more than 70% of all usage. Work usage is more common for educated users in highly-paid professional occupations. We classify messages by conversation topic and find that “Practical Guidance, ” “Seeking Information, ” and “Writing” are the three most common topics and collectively account for nearly 80% of all conversations. Writing dominates work-related tasks, highlighting chatbots’ unique ability to generate digital outputs compared to traditional search engines. Computer programming and self-expression both represent relatively small shares of use. Overall, we find that ChatGPT provides economic value through decision support, which is especially important in knowledge-intensive jobs. |
| JEL: | J01 O3 O4 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34255 |
| By: | Arash Peik; Mohammad Ali Zare Chahooki; Amin Milani Fard; Mehdi Agha Sarram |
| Abstract: | Precise short-term price prediction in the highly volatile cryptocurrency market is critical for informed trading strategies. Although Temporal Fusion Transformers (TFTs) have shown potential, their direct use often struggles in the face of the market's non-stationary nature and extreme volatility. This paper introduces an adaptive TFT modeling approach leveraging dynamic subseries lengths and pattern-based categorization to enhance short-term forecasting. We propose a novel segmentation method where subseries end at relative maxima, identified when the price increase from the preceding minimum surpasses a threshold, thus capturing significant upward movements, which act as key markers for the end of a growth phase, while potentially filtering the noise. Crucially, the fixed-length pattern ending each subseries determines the category assigned to the subsequent variable-length subseries, grouping typical market responses that follow similar preceding conditions. A distinct TFT model trained for each category is specialized in predicting the evolution of these subsequent subseries based on their initial steps after the preceding peak. Experimental results on ETH-USDT 10-minute data over a two-month test period demonstrate that our adaptive approach significantly outperforms baseline fixed-length TFT and LSTM models in prediction accuracy and simulated trading profitability. Our combination of adaptive segmentation and pattern-conditioned forecasting enables more robust and responsive cryptocurrency price prediction. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.10542 |
| By: | Nicolas Barbaroux; Claire Brousse; Déborah Zribi |
| Abstract: | 2024 witnessed a proliferation of fund tokenisation initiatives, particularly the tokenisation of money market funds. If this trend were to continue, it could increase the degree of interconnection between the traditional financial system and the cryptoasset sector, ultimately leading to new risks for financial stability. <p> Au cours de l’année 2024, les initiatives de tokenisation des fonds se sont multipliées et notamment la tokenisation des fonds monétaires. S’il s’amplifiait, ce mouvement pourrait renforcer les interconnexions entre le système financier traditionnel et le secteur des cryptoactifs et entrainer à terme de nouveaux risques pour la stabilité financière. |
| Date: | 2025–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:408 |
| By: | Baorui Li; Xincheng Ma; Brian Rongqing Han; Daizhong Tang; Lei Fu |
| Abstract: | As platforms increasingly deploy robots alongside human labor in last-mile logistics, little is known about how contextual features like product attributes, environmental conditions, and psychological mechanisms shape consumer preference in real-world settings. To address this gap, this paper conducts an empirical study on consumer choice between human versus robot service, analyzing 241, 517 package-level choices from Alibaba's last-mile delivery stations. We identify how product privacy sensitivity, product value, and environmental complexity affect consumer preference. Our findings reveal that consumers are significantly more likely to choose robot delivery for privacy-sensitive packages (11.49%) and high-value products (0.97% per 1% increase in value), but prefer human couriers under adverse weather conditions (1.63%). These patterns are robust to alternative specifications and controls. These results also underscore that delivery choices are shaped not only by functional considerations but also by psychological concerns, highlighting the need for context-aware service design that aligns strategies with consumer perceptions. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.11562 |
| By: | Mark L. Egan; Ali Hortaçsu; Nathan A. Kaplan; Adi Sunderam; Vincent Yao |
| Abstract: | We examine the implications of sleepy deposits and their impact on competition, bank value, and financial stability in the US banking sector. We first document the shopping behavior of depositors using novel data on account openings and closures. Depositors infrequently shop for deposits, with 5–15% of depositors opening a new account each year. Shopping behavior is idiosyncratic: deposit accounts are more likely to be closed due to the depositor either moving or dying than because the depositor switched to a new account offering higher rates or better services. Building on these facts, we develop an empirical model of the supply and demand for "sleepy deposits." In the model, banks face dynamic "invest-versus-harvest" incentives in competing for depositors who shop infrequently. We estimate the model and find that depositor sleepiness accounts for 58% of the average bank’s deposit franchise value. Sleepiness softens competition, particularly raising markups and franchise value for banks in low-concentration areas, as well as for banks with either low-quality deposit services or high marginal costs. Sleepiness also creates stability in the banking sector. For two main money center banks in the US, the probability of default after the Federal Reserve's 2022-2023 hiking cycle would have increased to more than 20% in a counterfactual without sleepy depositors. |
| JEL: | G0 G21 L0 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34267 |