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on Payment Systems and Financial Technology |
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Issue of 2024‒08‒19
thirty-one papers chosen by |
| By: | Ana Aguilar; Jon Frost; Rafael Guerra; Steven Kamin; Alexandre Tombini |
| Abstract: | We examine the relationship between digital payment innovation, economic growth and informal activities in 101 economies over 2014–19. Following the economic growth literature, panel regressions relate growth rates of GDP per capita, total factor productivity (TFP) and the share of informal sector employment to lagged levels of these variables, the extent of digital payments use and various controls for endogeneity. We find that a one-percentage point increase in digital payments use is associated with increases in the growth of GDP per capita of 0.10 percentage points over a two-year period, and a decline in the share of informal sector employment of 0.06 percentage points over a two-year period. Insofar as the reported share of the population making digital payments ranges nearly from 0 to 100 percent, this is substantial. Digital payments do not appear to be significantly associated with rises in TFP, once controlling for general measures of digitalisation and government effectiveness, but they are linked to greater financial inclusion and credit access. Our results reinforce the case for government policies to encourage digital payments and, as complementary factors, access to the financial sector and information technology. |
| Keywords: | digital innovation, informal economy, productivity, economic growth |
| JEL: | G21 G23 O32 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1196 |
| By: | Ozili, Peterson K |
| Abstract: | The purpose of this article is to explore the role of artificial intelligence, or AI, in a central bank digital currency project and its challenges. Artificial intelligence is transforming the digital finance landscape. Central bank digital currency is also transforming the nature of central bank money. This study also suggests some considerations which central banks should be aware of when deploying artificial intelligence in their central bank digital currency project. The study concludes by acknowledging that artificial intelligence will continue to evolve, and its role in developing a sustainable CBDC will expand. While AI will be useful in many CBDC projects, ethical concerns will emerge about the use AI in a CBDC project. When such concerns arise, central banks should be prepared to have open discussions about how they are using, or intend to use, AI in their CBDC projects. |
| Keywords: | artificial intelligence, central bank digital currency, CBDC, machine learning, deep learning, cryptocurrency, CBDC project, CBDC pilot, blockchain |
| JEL: | E50 E51 E52 E58 O31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121567 |
| By: | Michelle W. Bowman |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgsq:98528 |
| By: | Ozili, Peterson K |
| Abstract: | The objective of this article is to discuss the role of financial inclusion in combating financial crime. It was found that financial crime is a challenge in society. Financial crime is any action or omission that leads to unlawful or illegal financial dealings. Many countries are seeking ways to combat financial crime. Many ideas have been considered on how to combat financial crime. Financial inclusion is a possible solution for combating financial crime. Financial inclusion involves granting access to basic formal financial services to all segments of society. I show that financial inclusion makes the work of investigators easier by leaving an audit trail whenever financial crime is committed in the formal financial system. It helps investigators to detect fraud or financial crime that has occurred in the formal financial system. |
| Keywords: | financial inclusion, financial crime, fraud detection |
| JEL: | G21 G28 M42 M48 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121566 |
| By: | Michael S. Barr |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgsq:98527 |
| By: | Marie-Hélène Felt; Angelika Welte; Katrina Talavera |
| Abstract: | Mobile phones are ubiquitous around the world, making them obvious conduits for innovative payment technologies, or mobile payments. In Canada, five out of six adults regularly use a mobile phone. However, they have not started to use mobile payments at the same rate as other payment innovations, such as contactless card payments. In this paper, we present a two-stage model of mobile phone and mobile payment use. An important feature of the model is that it controls for selectivity due to mobile device adoption. Controlling for selection into mobile phone usage reveals unobserved factors that have negative effects on mobile phone usage but a positive effect on the propensity to use mobile-type payments. These factors could be preferences or constraints. We present empirical evidence that providing people without a mobile phone access to payments with features similar to mobile payments could result in usage rates exceeding the current use among mobile phone owners. Therefore, people who are unable to acquire or choose not to own a mobile device might have unmet payment needs. |
| Keywords: | Digital currencies and fintech; Econometric and statistical methods |
| JEL: | C14 C57 C92 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-25 |
| By: | Coste, Charles-Enguerrand |
| Abstract: | This paper explores the relationship between banks and stablecoins and their issuers, focusing on the mechanical effects on banks’ capital and liquidity ratios when issuing stablecoins or collecting deposits from stablecoin issuers.The analysis reveals that converting retail deposits into stablecoin issuers’ deposits weakens a bank’s liquidity coverage ratio (LCR), turning a retail deposit into a wholesale deposit, even when these funds are reinvested in high-quality liquid assets. If a credit institution issues its own stablecoins, the impact on its LCR depends on whether it can identify the stablecoin holders; unknown holders weaken the LCR which could incentivise banks to issue stablecoins where they can continually identify the holders to benefit from more favourable liquidity treatment. Additionally, banks must either hold the reserves backing the stablecoins as central bank reserves or reinvest them in low-risk assets, making these funds a less effective source for economic financing and maturity transformation compared with traditional retail deposits. The study also finds that when retail customers of bank A buy a stablecoin issued by a non-bank that keeps reserves at bank B, both banks could see an unexpected decline in their liquidity ratios, as bank A loses stable retail deposits and bank B gains volatile wholesale deposits. These insights are crucial to understanding the dynamics between banks and stablecoins in the evolving financial landscape. JEL Classification: E40, E42, E49, G11, G15, G18, G20, G21, G23, G28 |
| Keywords: | bank, bank’s balance sheet, crypto-asset, e-money, MiCAR, prudential regulation, stablecoin |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2024353 |
| By: | Cheikh, Nidhaleddine Ben (ESSCA School of Management); Rault, Christophe (University of Orléans) |
| Abstract: | While the financial inclusion would induce greater pollutant emissions through its impact of economic activity, the increased access to financial services may unleash investments in green technologies. This papier investigates whether the financial inclusion influences the dynamic of carbon dioxide (CO2) emissions in a sample of 70 countries during the last decade. We implement panel threshold techniques to explore the possible regime shifts in the environmental quality. Our results reveal that an increased financial access impacts air pollution depending on the level of economic development. While financial inclusion would increase CO2 emissions under lower-income regimes, the environment quality seems to be enhanced with more inclusiveness at later stages of development. Sounder environmental policies are needed for less developed countries to align financial inclusion initiatives with sustainable economic development. |
| Keywords: | financial inclusion, carbon emissions, panel threshold modelling |
| JEL: | C23 O16 O44 Q53 Q56 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17150 |
| By: | Kornelakis, Andreas; Petrakaki, Dimitra |
| Abstract: | The puzzle of how Nokia lost the smartphone wars has intrigued recent scholarship. Despite Nokia’s dominant position in the mobile phone industry and its technological capabilities and reputation for strategic agility, it was completely wiped out from the market, only a few years after the launch of Apple’s iPhone. The article provides a comparative, historical and institutional account on the smartphone industry by focusing on three key players: Nokia, Apple, and Samsung. This perspective enriches earlier accounts that were overly focused on explaining Nokia’s decline by looking at internal organisational design and conflicts. We propose a two-pronged explanation focused on the reconfiguration of industry platforms and financialisation. The article suggests that single company histories could be enriched by integrating a comparative perspective that examines additional cases. We discuss opportunities for further research to understand how success or failure in technological innovation is embedded in a wider societal and institutional context. |
| Keywords: | comparative capitalism; financialisation; industry platforms; innovation; technology |
| JEL: | R14 J01 L81 |
| Date: | 2024–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124386 |
| By: | Shubham Singh |
| Abstract: | The study examines whether broader market factors and the Fama-French three-factor model can effectively analyze the idiosyncratic risk and return characteristics of Bitcoin. By incorporating Fama-french factors, the explanatory power of these factors on Bitcoin's excess returns over various moving average periods is tested. The analysis aims to determine if equity market factors are significant in explaining and modeling systemic risk in Bitcoin. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.19401 |
| By: | Annetta Ho; Cosmin Cazan; Andrew Schrumm |
| Abstract: | This paper describes the ecology of automated market makers (AMMs), which are the most popular decentralized exchange model for the pricing and trading of crypto assets within decentralized finance. We use blockchain data to identify trends in user adoption and trading volumes of AMMs. Given the range of AMMs available and the diversity of their designs, we perform case studies on four platforms—Uniswap, Curve, Sushiswap and Balancer—to represent the AMM market. We describe the designs of these four AMMs in terms of their products or services, governance, incentives for participation and risks. Finally, we describe the characteristics of AMMs that require considerations with respect to the application of a regulatory framework to AMMs. Findings are presented for information and do not represent any formal legal analysis or opinion. |
| Keywords: | Digital currencies and fintech; Financial markets; Financial stability; Financial system regulation and policies |
| JEL: | G1 G2 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocadp:24-12 |
| By: | Dian Masita Dewi (Faculty of Management and Business, University of Lambung Mangkurat, Indonesia Author-2-Name: Ikhwan Faizal Author-2-Workplace-Name: Faculty of Management and Business, University of Lambung Mangkurat, Indonesia Author-3-Name: Teddy Aris Sambe Author-3-Workplace-Name: Faculty of Management and Business, University of Lambung Mangkurat, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective - Different countries have different policies towards cryptocurrencies. In Indonesia, cryptocurrency is prohibited as a means of payment or transaction. The prohibition is stated in Bank Indonesia Regulation (PBI) Number 18/40/PBI/2016 concerning the Implementation of Payment Transaction Processing. However, cryptocurrencies are recognized as long-term commodities or investment assets, so their supervision is carried out by the Commodity Futures Trading Supervisory Agency (bappepti) and regulated in Bappebti Regulation No. 7 of 2020 concerning the Determination of the List of Crypto Assets that Can be Traded on the Crypto Asset Physical Market. This study aims to analyze the differences in return and risk on the 5 cryptocurrencies with the largest market capitalization in Indonesia. Methodology/Technique - This research uses quantitative methods with a descriptive approach, and secondary data is used. The population in this study consisted of 383 cryptocurrencies that were legal and registered with Bappepti from 2020 to 2022. The sample was determined using purposive sampling to determine the top 5 cryptocurrencies with the largest market capitalization during the observation period from January 2020 to September 2022. The data analysis technique used the Kruskal-Wallis test. Findings - The results showed no significant differences in return and risk between Bitcoin, Ethereum, Tether, BNB, and USD coins. Empirically, this study proves that each cryptocurrency has the same risk and return. Novelty - This research was conducted in Indonesia with regulations that may differ from other countries towards cryptocurrencies. As a long-term commodity investment asset, this study finds empirical evidence that each cryptocurrency has the same risk and return. Type of Paper - Empirical" |
| Keywords: | Cryptocurrency; Investment; Return; Risk; Bappepti |
| JEL: | G11 G18 G28 |
| Date: | 2024–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:afr233 |
| By: | Claire Greene; Julian Perry; Joanna Stavins |
| Abstract: | Despite the introduction of an array of innovations and new payment options for consumers over the last decade, income and demographics remain significant predictors of payment behavior. Using data from a 2023 consumer payments diary, we find that income, age, and education are significant predictors of which payment instruments consumers adopt and use. These associations hold not only for traditional payment instruments—cards and paper—but also for innovations such as mobile apps; buy now, pay later (BNPL); and cryptocurrency. In 2023, less educated consumers were significantly less likely than other consumers to adopt any payment instrument, especially checks and electronic payments, even when we control for income and employment. After controlling for education, we find that high‐income consumers used credit cards significantly more relative to other consumers. Younger and more educated consumers were most likely to adopt mobile payment apps. Women, Black and Latino consumers, and those who had filed for bankruptcy in the previous year were significantly more likely to have used BNPL. Men were nearly three times as likely as women to adopt cryptocurrency. |
| Keywords: | payment instruments; consumer payments; payment behavior |
| JEL: | E41 D14 D12 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:98618 |
| By: | Zhang, Ying; Gong, Bing; Zhou, Peng (Cardiff Business School) |
| Abstract: | This paper presents a thorough examination of centralized use of a decentralized technology (blockchain) in monetary and financial systems at the national level. A comparative study is conducted to summarize the regulatory and legislative frameworks of currency/asset tokenization in seven major economies (US, EU, UK, Switzerland, Australia, Japan, and South Korea). China is then used as a case study to explore how blockchain technology is adopted to enable central bank digital currency, bond tokenization, and “currency bridge†. Based on various contexts analyzed, we extend the Technology Acceptance Model, highlighting the roles of perceived benefits, perceived risks, and collaborative leadership in building trust in and promoting adoption of tokenization. Policymakers and practitioners are recommended to follow a gradual, eclectic, and collaborative approach to tokenization. |
| Keywords: | Blockchain; Tokenization; CBDC; Decentralization; Collaborative Leadership |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2024/14 |
| By: | Thierry Warin |
| Abstract: | Disinformation has become a substantial threat to democratic institutions and societal stability, intensified by the proliferation of social media. Traditionally spread through media like newspapers and television, information was controlled by gatekeeping mechanisms. However, the rise of social media has changed this dynamic, allowing rapid, widespread dissemination without traditional checks. Algorithms prioritizing engagement amplify sensational content, facilitating the spread of falsehoods. This paper examines the extensive impact of disinformation, including the erosion of public trust, distortion of democratic processes, and manipulation of electoral outcomes. It traces the evolution of disinformation from traditional media to digital platforms, emphasizing the need for scientific research to develop detection technologies and effective policies. Strategies to combat disinformation include enhancing digital literacy, increasing transparency of information sources, and implementing regulatory frameworks for social media accountability. AI-driven tools and international cooperation are essential to safeguard democratic integrity. It is crucial to reflect on and discuss these issues to develop comprehensive and effective solutions. La désinformation est devenue une menace importante pour les institutions démocratiques et la stabilité de la société, intensifiée par la prolifération des médias sociaux. Traditionnellement diffusées par des médias tels que les journaux et la télévision, les informations étaient contrôlées par des mécanismes de régulation. Toutefois, l'essor des médias sociaux a modifié cette dynamique, en permettant une diffusion rapide et à grande échelle sans les contrôles traditionnels. Les algorithmes qui privilégient l'engagement amplifient le contenu sensationnel, facilitant ainsi la diffusion de fausses informations. Ce « Rapport pour réflexion » examine l'impact considérable de la désinformation, notamment l'érosion de la confiance du public, la distorsion des processus démocratiques et la manipulation des résultats électoraux. Il retrace l'évolution de la désinformation, des médias traditionnels aux plateformes numériques, en soulignant la nécessité de la recherche scientifique pour développer des technologies de détection et des politiques efficaces. Les stratégies de lutte contre la désinformation comprennent le renforcement de la culture numérique, l'amélioration de la transparence des sources d'information et la mise en œuvre de cadres réglementaires pour la responsabilité des médias sociaux. Les outils pilotés par l'IA et la coopération internationale sont essentiels pour préserver l'intégrité démocratique. Il est essentiel de réfléchir à ces questions et d'en débattre afin d'élaborer des solutions globales et efficaces. |
| Keywords: | Disinformation, Social media, Artificial Intelligence, Democratic Institutions, Public Trust, Digital Literacy, Désinformation, Médias sociaux, Intelligence artificielle, Institutions démocratiques, Confiance du public, Culture numérique |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:cir:circah:2024pr-03 |
| By: | Jia Qi Xiao |
| Abstract: | I analyze the relationship between carrying a credit card balance and future financial stress. I find that carrying a balance significantly increases the likelihood that credit card holders miss future debt payments. This likelihood tends to rise as credit card balances grow and are held for long periods. |
| Keywords: | Credit and credit aggregates; Financial institutions; Interest rates; Recent economic and financial developments |
| JEL: | D1 E4 E5 G2 G21 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsan:24-18 |
| By: | Paul Heidhues (Heinrich Heine University Düsseldorf); Mats Kösters (Central European University, Vienna); Botond Kőszegi (University of Bonn) |
| Abstract: | We develop a model of digital ecosystems based on the assumption that a multimarket firm can use a sale in or data from one market to steer users toward its products in other markets. Due to this “cross-market leverage, ” a market leader at an “access point” (where users begin their online journeys) has a high value from offering services in connected markets (where users continue their journeys), and can thus make profitable takeovers. Indeed, because the firm has the threatening outside option of acquiring, and steering users toward, its target’s competitor, it can take over the target at a discount. In contrast, other firms have no or smaller incentives for takeovers, explaining why ecosystems grow out of market leaders at access points. Conversely, cross-market leverage also implies that once an ecosystem has grown, it has an increased value of controlling access points, so it may go to great lengths to dominate these markets. Our theory’s logic suggests that ecosystems have mixed implications for consumer welfare. Under plausible assumptions, a to-be ecosystem takes over market leaders, and this consolidation of good services across markets benefits consumers in the short run. But an ecosystem’s takeovers and dominance of access points lower incentives for entry and innovation, and lower the efficiency of access-point markets with superior alternatives. Hence, the long-run welfare implications of ecosystem growth are often negative. |
| Keywords: | Digital ecosystems, takeover, contestability, entry, envelopment, default effects, steering |
| JEL: | L41 L86 L22 D43 D83 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:329 |
| By: | Saroj Bhattarai; Mohammad Davoodalhosseini; Zhenning Zhao |
| Abstract: | How does the transmission of monetary policy change when a central bank digital currency (CBDC) is introduced in the economy? Do aspects of CBDC design, such as how substitutable it is with bank deposits and whether it is interest bearing, matter? We study these questions in a general equilibrium model with nominal rigidities, liquidity frictions, and a banking sector where commercial banks face a leverage constraint. In the model, CBDC and commercial bank deposits can be used as a means of payments, and they provide liquidity services to households. Banks issue deposits and extend loans to firms, and bank deposits are backed by loans and central bank reserves. We find that the effects of a canonical monetary policy shock, a shock to the Taylor rule that governs interest on central bank reserves, is magnified with the introduction of a fixed-interest-rate CBDC. More generally, whether CBDC magnifies or abates the response of the economy depends on the type of shock (e.g., interest rate or quantity of reserves shock). We also find that the response of the economy depends on the monetary policy framework—whether the central bank implements monetary policy through reserves or through CBDC—as well as central bank balance sheet rules that govern the quantity of CBDC and reserves. |
| Keywords: | Digital currencies and fintech; Monetary policy; Monetary policy framework; Monetary policy transmission; Interest rates |
| JEL: | E31 E4 E50 E58 G21 G51 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-27 |
| By: | Chong Yu (Graduate School of Business Administration, Kwansei Gakuin University); Masatoshi Kato (School of Economics & Research Center for Entrepreneurship (RECENT), Kwansei Gakuin University) |
| Abstract: | This study explores whether firms founded by user entrepreneurs have an advantage in raising external capital at start-up, distinguishing between end-user and professional user entrepreneurs. Drawing on the concept of user entrepreneurship in combination with the resource-based view of the firm, we argue that being user entrepreneurs serves as a positive signal to external providers of capital under information asymmetry. Using data based on original questionnaire survey for start-ups in Japan, it is shown that firms founded by user entrepreneurs, especially professional user entrepreneurs, are more likely to raise external capital at start-up. Furthermore, the advantage of user entrepreneurs is found to be more pronounced in firms that engaged in business-to-consumer (B2C) than in business-to-business (B2B). |
| Keywords: | User entrepreneur, end-users, professional users, resource-based view, B2C |
| JEL: | L26 M13 G30 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:kgu:wpaper:275 |
| By: | Braggion, Fabio (Tilburg University, School of Economics and Management); Manconi, Alberto (Tilburg University, School of Economics and Management); Zhu, Haikun (Tilburg University, School of Economics and Management) |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:9fbc0f2e-26f5-414f-8384-c6f68369a8f1 |
| By: | Xun Deng; Sidi Mohamed Beillahi; Cyrus Minwalla; Han Du; Andreas Veneris; Fan Long |
| Abstract: | This paper presents OVer, a framework designed to automatically analyze the behaviour of decentralized finance (DeFi) protocols when subjected to a "skewed" oracle input. OVer firstly performs a symbolic analysis on the given contract and constructs a model of constraints. Then, the framework leverages a satisfiability modulo theory solver to identify parameters that allow its secure operation. Furthermore, guard statements can be generated for smart contracts that may use the oracle values, thus effectively preventing oracle manipulation attacks. Empirical results show that OVer can successfully analyze all 10 benchmarks collected, which encompass a diverse range of DeFi protocols. Additionally, this paper illustrates that current parameters used in the majority of benchmarks are inadequate to ensure safety when confronted with significant oracle deviations. It shows that existing ad-hoc control mechanisms such as introducing delays are often insufficient or even detrimental to protect the DeFi protocols against the oracle deviation in the real world. Moreover, this paper delves into the design considerations of price oracles within a potential blockchain-based digital currency. |
| Keywords: | Central bank research; Digital currencies and fintech; Payment clearing and settlement systems |
| JEL: | G15 E42 E51 O31 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocadp:24-10 |
| By: | Chiet-Bing Wong ("Faculty of Accountancy, Finance & Business, Tunku Abdul Rahman University of Management and Technology, Malaysia." Author-2-Name: Tan Sharon @ Rebecca Author-2-Workplace-Name: "Faculty of Accountancy, Finance & Business, Tunku Abdul Rahman University of Management and Technology, Malaysia." Author-3-Name: Karen Esther Tan Author-3-Workplace-Name: "Faculty of Accountancy, Finance & Business, Tunku Abdul Rahman University of Management and Technology, Malaysia." Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - Creating an independent online store presents businesses with an opportunity to cultivate their brand and devoted customer base. To achieve long-term success, it is crucial to build a new customer base and establish initial trust. Prior research has explored various aspects of initial trust and identified factors crucial for businesses in devising strategies to attract customers. However, while some studies have investigated the impact of perceived relative advantage on initial trust, the findings remain inconclusive, leaving unexplored facets. This study aimed to scrutinize how perceived relative advantage influences customers' initial beliefs and intentions to trust an unfamiliar online store retailer. Methodology/Technique - Data gathered from a survey underwent statistical analysis using Structural Equation Modeling (SEM). Findings - The results revealed that perceived relative advantage significantly and positively impacted both initial trusting beliefs and intention. This research contributes to comprehending the relationship between initial trust and perceived relative advantage, especially in an underexamined context in Malaysia. Novelty - The study developed and validated a research model that extends the Theory of Reasoned Action (TRA) by incorporating perceived relative advantage as a key antecedent to initial trust. In practical terms, it provides valuable guidance for new online store retailers in formulating strategies to establish trust with their initial consumers, and brand-new online store retailers in conceiving strategies for establishing initial consumer trust. Type of Paper - Empirical" |
| Keywords: | Trust; Initial Trust; Perceived Relative Advantage; Trusting Beliefs; Trusting Intention, E-Commerce |
| JEL: | M15 M10 |
| Date: | 2024–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jmmr333 |
| By: | Amrutha Muralidhar; Muralidhar Lakkanna |
| Abstract: | The evolution of cryptocurrency and decentralized finance (DeFi) marks a significant shift in the financial landscape, making it more accessible, inclusive, and participative for various societal groups. However, this transition from traditional financial institutions to DeFi demands a meticulous policy framework that strikes a balance between innovation and safeguarding consumer interests, security, and regulatory compliance. In this script we explore the imperative need for regulatory frameworks overseeing cryptocurrencies and DeFi, aiming to leverage their potential for inclusive economic advancement. It underscores the prevalent challenges within conventional financial systems, juxtaposing them with the transformative potential offered by these emergent financial paradigms. By highlighting the role of robust regulations, we examine their capacity to ensure user security, fortify market resilience, and spur innovative strides. We aim to proffer viable strategies for formulating regulatory structures that harmonize the twin objectives of fostering innovation and upholding fairness within financial ecosystems. |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.01532 |
| By: | Jason Allen; Michael Boutros; Benedict Guttman-Kenney |
| Abstract: | We study a government policy that restricts repayment choices with the aim of reducing credit card debt. The policy requires the minimum payment on credit card balances in Quebec to be at least 2% of the statement balance for cards opened before August 2019 and at least 5% for cards opened after August 2019. The rest of Canada is unaffected. We estimate this policy’s effects by applying a difference-in-differences methodology to comprehensive, Canadian consumer credit-reporting data. The policy causes a persistent increase in minimum payments. The policy has trade-offs: reducing revolving debt comes at a cost of reducing credit access, and potentially increasing delinquency. |
| Keywords: | Credit and credit aggregates; Financial system regulation and policies |
| JEL: | D18 E21 G28 G51 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-26 |
| By: | Rodney Garratt; Maarten RC van Oordt |
| Abstract: | Crypto exchange tokens are an important funding source for centralized crypto exchanges, and they have been at the core of some of the biggest disruptions in the crypto industry. We develop a tractable model for the exchange rates of crypto exchange tokens that incorporates user demand, investment demand, and commonly observed pledges by exchanges to buy back tokens. We derive closed-formed solutions for the valuation of exchange tokens and the time required to fulfill the pledge. Buyback pledges increase the amount of funding raised by selling tokens. However, the additional amount raised is always less than the discounted cost of the buyback pledge. Future price manipulation by investors can further increase the cost of the buyback pledge. |
| Keywords: | asset pricing, cryptocurrencies, exchanges, market manipulation |
| JEL: | G10 G12 G18 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1201 |
| By: | Ms. Kazuko Shirono; Berhe Beyene; Fozan Fareed; Christiaan Loots; Andrea Quevedo; Kameshnee Naidoo |
| Abstract: | Greater availability of financial access related data in recent years is increasingly enabling policymakers to better track and monitor financial access trends and developments. However, data on barriers to financial access, including costs associated with using financial services—a key factor of financial exclusion—remain scarce. To gain insight into the costs of financial access faced by the low-income segments of population, this paper presents an analysis of a novel dataset on bank pricing containing information on fees and charges associated with various banking services—collected as part of the United Nations Capital Development Fund’s (UNCDF) Making Access Possible (MAP) program—based on a market research approach for 34 low- and middle-income countries in the ASEAN, SADC, and WAEMU regions. The results of our affordability analysis reveal that the costs of maintaining a bank checking account and conducting a few basic transactions can exceed 5 percent of monthly income for consumers in more than 10 percent of the countries in the sample, mainly in the WAEMU and SADC regions. These findings underscore the considerable challenge of affordability as a significant barrier to access to financial services, especially for low-income households and SMEs. The analysis also highlights the need to collect more granular data on the affordability aspect of financial access to facilitate more effective policymaking. |
| Keywords: | Financial access; affordability; bank pricing; financial inclusion |
| Date: | 2024–07–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/150 |
| By: | Welker, Carl B. |
| Abstract: | Distributed Ledger Technologies (DLT) and their most prominent version, the blockchain, enable a new type of organization: Decentralized Autonomous Organizations (DAOs). DAOs consist of software code, mainly smart contracts, and the DAO members. Members keep governance tokens that grant property rights, e.g. voting rights. DAOs are featured by anonymity of their members and zero hierarchy coordination. Subsequently, DAOs are predestined for shaping web3 communities, managing decentralized applications (dApps) and operating digital business of any kind in the future. In last instance, DAOs may be entirely autonomous due to fully automated smart contracts. Since DAOs operate on blockchains, they are far from day-to-day bureaucracy and formal legal requirements. Seen from a common business point of view, startups and entrepreneurs might criticize a lack of structure and decency of DAOs. Moreover, it has been reported that U.S. authorities sued and made DAO initiators and token owners personally liable for violating federal law. This discussion paper describes essential features of DAOs and discusses major characteristics of a business firm. Moreover, the author points at favourable U.S. locations for setting up a DAO with a LLC body, however still keeping core web3 features such as its decentralized mode of operation and anonymity for token owners. |
| Keywords: | Startups, Web3, Distributed Ledger Technologies, Blockchain, Tokenization, Decentralized Autonomous Organization, DAO, Wyoming, LAO |
| JEL: | K00 L20 L22 L26 M13 N40 O17 O32 O33 O35 O38 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iubhbm:300237 |
| By: | Autio, Erkko (Imperial College Business School); Chiyachantana, Chiraphol (Singapore Management University); Castillejos-Petalcorin, Cynthia (Asian Development Bank); Fu, Kun (Loughborough University London); Habaradas, Raymund (De La Salle University); Jinjarak, Yothin (Asian Development Bank); Muftiadi, Anang (Universitas Padjadjaran); Park, Donghyun (Asian Development Bank); Prasarnphanich, Pattarawan (Chulalongkorn University); Quyên, Pham Minh (Thu Dau Mot University); Smit, Willem (Fulbright University Vietnam) |
| Abstract: | This report investigates the impact of digitalization on firm-level performance using survey data from 681 digital entrepreneurs across six Association of Southeast Asian Nations (ASEAN) countries. Results show that the reliance of the business on select digital applications and the digitalization of different aspects of the firm’s business models were found to be potent drivers of business model experimentation in entrepreneurial businesses. We also observed consistent mediation effects of digitalization variables on performance through their effect on business model experimentation, although the digitalization variables also exhibited strong direct effects on performance. This last observation signals that the adoption of digital technologies by entrepreneurial businesses has more wide-ranging beneficial impacts than their facilitating effect on business model experimentation. We consider the findings reported here to be of significant value for the design of entrepreneurial and digitalization policies in Asian developing economies and in emerging economies more widely. Our analysis points to important performance implications of digital technology adoption by entrepreneurial businesses. |
| Keywords: | digitalization; business model innovation; entrepreneurial performance; ASEAN; sustainability performance |
| JEL: | L26 O32 O33 |
| Date: | 2024–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0734 |
| By: | Sandrini, Luca; Somogyi, Robert |
| Abstract: | We build a model of the news market where advertisers allocate their ads between a social media platform and a news website. Our objective is to evaluate policy interventions aimed at fostering news creation by transferring revenues from social media to news websites already introduced in Australia, Canada, and Indonesia). We show that social media may voluntarily contribute to news development, but only suboptimally. Beyond a certain level of state-mandated transfer, the social media platform can credibly threaten to remove news content. We provide some guidance on how to design a policy that improves welfare by promoting news creation. |
| Keywords: | social media, news quality, platform regulation, news media bargaining code, online advertising |
| JEL: | D43 D62 L13 L51 M37 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300268 |
| By: | Paulina Y. Amtiran (Universitas Nusa Cendana, Kupang, Indonesia Author-2-Name: Anderias U. T. Anabuni Author-2-Workplace-Name: "Universitas Nusa Cendana, Kupang, Indonesia " Author-3-Name: Elisabeth Yuni Author-3-Workplace-Name: "Universitas Nusa Cendana, Kupang, Indonesia " Author-4-Name: Marselin Y. Balle Author-4-Workplace-Name: "Universitas Nusa Cendana, Kupang, Indonesia " Author-5-Name: "Jhimi Maima" Author-5-Workplace-Name: "Universitas Nusa Cendana, Kupang, Indonesia " Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - The purpose of this study is to find the impact of financial literacy of micro and small enterprises on financial products. Methodology/Technique – Data was collected through the distribution of questionnaires. The method used was data analysis using multiple regression analysis technique. The sample of this study was 70 small and micro enterprises in Sumba Island, East Nusa Tenggara. Findings – The findings reveal a positive correlation between financial literacy and financial products. Novelty – Improving financial literacy among SMEs will lead to increased use of financial products. The significance of this study is to implement information dissemination and training programs to improve financial literacy and promote the adoption of financial products among SMEs in Sumba Island. Type of Paper - Empirical" |
| Keywords: | Inclusion, Financial Literacy, Financial Knowledge, Financial Behavior, Financial Attitude |
| JEL: | G02 G32 G39 |
| Date: | 2024–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jfbr223 |
| By: | OECD |
| Abstract: | By mapping theories of harm that have been applied in recent digital merger cases and considering the analyses that have already been undertaken, this note explores the question of whether existing theories of harm are well suited or should be further adapted to comprehensively capture competitive harms arising from mergers in these markets. Or alternatively, whether new theories of harms are needed and if so, what they might look like. It was prepared as a background note for discussions on “Theories of Harm for Digital Mergers” taking place at the June 2023 session of the OECD Competition Committee. |
| Date: | 2023–05–03 |
| URL: | https://d.repec.org/n?u=RePEc:oec:dafaac:293-en |