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on Payment Systems and Financial Technology |
| By: | Eichacker, Nina |
| Abstract: | In recent years, cryptocurrencies have become more salient as speculative assets, and as sources of instability for wider swathes of the public. This has occurred at a global level, with both domestic and international spillover effects for core and peripheral economies. At the same time, analysts of cryptocurrency and blockchains have identified some institutional benefits of these innovations, including the ability to process payments outside of traditional business hours and the potential to provide banking services for households and institutions in regions that lack access to a formal banking sector. This paper considers how central banks’ efforts to create formal digital currencies may stabilize financial and monetary conditions. By offering a formal digital currency, central banks have the potential to diminish payment related demand for cryptocurrencies, and decrease the exposure households have to the volatility of cryptocurrency asset markets as well as to fraud endemic to the cryptocurrency markets. Offering a formal digital currency may be seen as a monetary form of public finance; in this case, the public alternative is a country’s own currency that may be usable in the blockchain, rather than forcing households to search for the most reputable or stable cryptocurrency alternatives. As households and businesses adopt CBDCs, they may leave cryptocurrency markets; while this might induce a brief period of instability in those markets, it would likely leave more volatile crypto asset markets to those best suited to managing the risk and potential reward of betting on existing assets, and insulate the risk averse from that volatility. |
| Date: | 2025–01–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:8muc4 |
| By: | Christian de Boissieu |
| Abstract: | Faced with the rise of cryptocurrencies, central banks are responding by launching their digital currencies. The purpose of this Policy Brief is to provide an update on the preparation of central bank digital currencies (CBDs) by monetary authorities, a process that concerns all emerging, developing, and more advanced countries. It is also about analyzing the conditions and some of the consequences (for banks, for financial inclusion, for the conduct of monetary policy...) of such a financial innovation, systematically distinguishing between wholesale and retail CBDCs. |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_19_23_0 |
| By: | Heng-fu Zou |
| Date: | 2025–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:735 |
| By: | Brühl, Volker |
| Abstract: | The introduction of central bank digital currencies (CBDCs) in general, and of a digital euro in particular, has attracted growing interest from academic research, central banks and political decision-makers. Most of the existing literature is focused on the impact of a digital euro on monetary policy issues, financial stability - especially the potentially enhanced risk of bank runs - and related questions concerning the design options of a digital euro. However, a digital euro could negatively affect the profitability of the European banking sector. Fees from payment transaction services could decline and refinancing costs could increase, as comparatively cheap financing from retail deposits would have to be replaced in part by more expensive financing instruments such as bonds or open market operations with the ECB. This paper deals with these aspects by estimating the potential impact of a digital euro in a simulation model based on current market data. The analysis demonstrates that the annual fee losses could be in the range of €2.1 billion to €4.2 billion. The associated refinancing need due to replacements of deposits by digital euro holdings could be in the range of €324 billion to €650 billion, translating into additional refinancing costs of around €6.5 billion to €19.5 billion p.a.. Therefore, a fair compensation model for banks and payment service providers is needed to avoid adverse consequences for the profitability and resilience of the European financial sector. The paper also discusses the general need for a retail digital euro in light of the expected benefits and risks as well as implications for design options to mitigate inherent risks. |
| JEL: | E42 E51 G21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfswop:308806 |
| By: | Kingsley, Obiora; Ozili, Peterson K |
| Abstract: | Using six widely accepted indicators, this study compares the progress made in financial inclusion in Nigeria, Sub-Saharan Africa and the rest of the World, with a view to deducing lessons that each entity can improve upon. We find that Nigeria outperformed sub-Saharan Africa in three indicators of financial inclusion while sub-Saharan Africa did better than Nigeria in one metric. Nigeria and sub-Saharan Africa exceeded the World average in informal borrowings. We also constructed an index of financial inclusion and found that financial institution account ownership, formal borrowing, informal borrowing and debit or card ownership are significant positive determinants of the financial inclusion index. These findings indicate that policymakers in Nigeria and sub-Saharan Africa have significant room for improving their financial inclusion standings towards the global average. We make recommendations on the aspects where policymakers can place their focus in pursuit of this goal. |
| Keywords: | financial inclusion, Nigeria, Sub-Saharan Africa, digital financial inclusion |
| JEL: | G00 G20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121548 |
| By: | Ginger Zhe Jin; Mario Leccese; Liad Wagman |
| Abstract: | This chapter examines the multifaceted interactions between top digital platforms and technology ventures across capital, labor, innovation, and product markets. Exploring how venture investments, talent flows, strategic alliances, and competitive behaviors can shape the innovation ecosystem, the chapter highlights both the complementary and competitive dynamics between large incumbents and smaller entrants, and the benefits and potential inefficiencies that may arise from them, as demonstrated by the empirical and theoretical literatures. Throughout, the chapter identifies key areas for research that can support a rigorous evaluation of policy proposals concerning evolving market structures in the digital economy. |
| JEL: | D4 L1 O3 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33370 |
| By: | Casas, Andreu (Royal Holloway, University of London); Dagher, Georgia; O'Loughlin, Ben |
| Abstract: | In this report we provide an overview of the kinds of data academics need in order to conduct independent research into political online safety matters on social media platforms, and the challenges they currently face. Additionally, we put forward ideas regarding novel governance structures that would enable high-quality independent research, while protecting users’ rights and data privacy, in the United Kingdom. |
| Date: | 2025–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:7pcjd |
| By: | Makoza, Frank |
| Abstract: | Social cash transfer plays a critical role is supporting vulnerable communities to overcome poverty and shocks in Malawi. Digital technologies are integrated in social cash transfer to improve operations and deliver value to citizens. This paper analysed the potential use of distributed ledger technology (DLT) in unified beneficiary registry (UBR) system for social cash transfer in Malawi. The study used concepts from Technology-Task fit theory to understand social cash transfer tasks and characteristics of UBR system using secondary data. The findings showed that DLT may enhance the functions of UBR in supporting data sharing in a decentralised manner, maintaining transparency and accountability in transactions, supporting electronic payments, improving security, and addressing issues of infrastructure. The study highlights the significance of training and compliance with legal and regulatory frameworks. The study contributes towards understanding of the use of DLT in social protection programs in the context of developing countries. The paper suggest recommendations for practitioners and areas of further research. |
| Keywords: | Distributed Ledger Technology, Blockchain, Unified Beneficiary Registry, Task-Technology fit Theory, Social Cash Transfer, Malawi |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:309043 |
| By: | Dung Quang Le (National Economics University, Vietnam Author-2-Name: Trang Quynh Phama Author-2-Workplace-Name: University of East London, UK Author-3-Name: Thi Phuong Nguyenb Author-3-Workplace-Name: International School, Vietnam National University, Hanoi, Vietnam 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 - The primary objective of this exploratory research is to investigate the factors affecting investment behavior in the Vietnamese Bitcoin market. Methodology/Technique – The study employs quantitative research methods, including surveys of the Vietnamese Bitcoin market, to gain valuable insights into the factors influencing investment behavior. It uses exploratory factor analysis and regression analysis for data analysis. Findings – Research results show that there are 5 factors affecting Bitcoin investment behavior in Vietnam: benefits, past experience, national laws, crowd effects, and the Bitcoin market. Among them, the two most influential factors are national interests and laws. The lowest impact factor is past experience. The study tested the differences in Bitcoin investment behavior between Bitcoin investors according to gender, age, income, and investment time. The study found no significant variance in the evaluation of gender, age, income, and investment time in Bitcoin investment behavior in Vietnam. Based on the regression results, the authors recommend practical solutions related to benefits, past experience, national laws, crowd effects, and the Bitcoin market. The aim is to assist Vietnamese investors in understanding the influence of factors on Bitcoin investments in Vietnam. From there, investors adopt the appropriate behaviors, views, and investments in Bitcoin and other virtual currencies. Novelty – The first study uses a quantitative method to address the factors affecting the investment behavior in the Vietnamese Bitcoin market. Type of Paper - Empirical" |
| Keywords: | Investment Behavior; Bitcoin Market; Investors' Decisions; Virtual Currencies |
| JEL: | G2 G29 |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jfbr226 |
| By: | Pak-Lok Poon; Santoso Wibowo; Sau-Fun Tang |
| Abstract: | Nowadays, the global booming of FinTech can be seen everywhere. FinTech has created innovative disruptions to traditional, long-established financial institutions (e.g., banks and insurance companies) in financial services markets. Despite of its popularity, there are many different definitions of FinTech. This problem occurs because many existing studies only focus on a particular aspect of FinTech without a comprehensive and in-depth analysis. This problem will hinder further development and industrial application of FinTech. In view of this problem, we perform a narrative review involving over 100 relevant studies or reports, with a view to developing a FinTech clustering framework for providing a more comprehensive and holistic view of FinTech. Furthermore, we use an Indian FinTech firm to illustrate how to apply our clustering framework for analysis. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.05285 |
| By: | Jia, Fernando; Zheng, Jade; Li, Florence |
| Abstract: | In the rapidly evolving landscape of GameFi, a fusion of gaming and decentralized finance (DeFi), there exists a critical need to enhance player engagement and economic interaction within gaming ecosystems. Our GameFi ecosystem aims to fundamentally transform this landscape by integrating advanced embodied AI agents into GameFi platforms. These AI agents, developed using cutting-edge large language models (LLMs), such as GPT-4 and Claude AI, are capable of proactive, adaptive, and contextually rich interactions with players. By going beyond traditional scripted responses, these agents become integral participants in the game's narrative and economic systems, directly influencing player strategies and in-game economies. We address the limitations of current GameFi platforms, which often lack immersive AI interactions and mechanisms for community engagement or creator monetization. Through the deep integration of AI agents with blockchain technology, we establish a consensus-driven, decentralized GameFi ecosystem. This ecosystem empowers creators to monetize their contributions and fosters democratic collaboration among players and creators. Furthermore, by embedding DeFi mechanisms into the gaming experience, we enhance economic participation and provide new opportunities for financial interactions within the game. Our approach enhances player immersion and retention and advances the GameFi ecosystem by bridging traditional gaming with Web3 technologies. By integrating sophisticated AI and DeFi elements, we contribute to the development of more engaging, economically robust, and community-centric gaming environments. This project represents a significant advancement in the state-of-the-art in GameFi, offering insights and methodologies that can be applied throughout the gaming industry. |
| Date: | 2025–01–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:tn5rx |
| By: | Amedeo Piolatto; Florian Schuett |
| Abstract: | We study the design of online platforms that aggregate information and facilitate trans actions. Leading players in the industry (e.g. the Booking Group) hold two types of platforms in their portfolio: revealing platforms that disclose the identity of transaction partners (like Booking.com) and anonymous platforms that do not (like Hotwire.com). Anonymous plat forms offer discounts but lead to inefficient matching between consumers and firms. We develop a model in which horizontally differentiated firms sell to heterogeneous consumers both directly and via a platform that enlarges the pool of consumers they can attract. The platform charges firms for transactions it intermediates and can choose to offer an anonym ous sales channel in addition to a revealing one. We show that offering both sales channels is profitable not only because it allows the platform to implement price discrimination, as suggested by the literature on opaque selling, but also because it improves rent extraction. The anonymous channel breaks the link between the price on the revealing channel and the firms’ outside option; moreover, it can reduce double marginalisation. The welfare impact of the anonymous channel is ambiguous: while it sometimes leads to market expansion, it also causes inefficiently high transport costs. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:ete:ceswps:746858 |
| By: | Xiao, Leon Y. (IT University of Copenhagen); Lund, Mie |
| Abstract: | Loot boxes in video games can be purchased with real-world money in exchange for random rewards. Stakeholders are concerned about loot boxes’ similarities with gambling and their potential harms (e.g., overspending money and developing gambling problems). The previous Conservative UK Government decided to first try relying on industry self-regulation to address the issue, rather than to impose legislation. These self-regulations have since been published by the industry trade body, Ukie (UK Interactive Entertainment). Responding to many stakeholders’ desire for a transparent and independent assessment of their implementation, we assessed companies’ compliance with three empirically testable measures and also whether the rules were actively enforced. The 100 highest-grossing iPhone games were longitudinally examined both prior to the self-regulations coming into effect on 18 July 2024 (i.e., between January and June 2024) and after to check for potential improvement (i.e., between July and December 2024). Disappointingly, widespread non-compliance and non-enforcement were observed. Amongst games with loot boxes, none (0.0%) sought to obtain explicit parental consent prior to enabling loot box purchasing by under-18s. Only 23.5% disclosed loot box presence, and the few disclosures were all visually obscured and difficult to access. A mere 8.6% consistently disclosed the probabilities of obtaining different rewards for all loot boxes found. The rules were not enforced, contrary to Ukie’s promise: all of the games that were non-compliant before the self-regulations came into effect remained non-compliant many months later, despite Ukie and the Apple App Store having been provided with evidence of the contraventions and put on notice to delist those games if remedial actions were not forthcoming. Platforms (e.g., app stores), the advertising regulator, and the consumer protection regulators must better enforce pre-existing rules to ensure adequate consumer protection as already promised. Video games and loot boxes are no longer novel; laws that apply to all industries must also be enforced against this one. Governments are advised against relying on industry self-regulation, especially after repeated demonstrations of its many failings. Stricter legal regulation of loot boxes should be adopted. Preregistered Stage 1 protocol: https://doi.org/10.17605/OSF.IO/3KNYB (date of in-principle acceptance: 25 March 2024). |
| Date: | 2025–01–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:xmwgy |
| By: | Marc Schmitt; Pantelis Koutroumpis |
| Abstract: | The digital age, driven by the AI revolution, brings significant opportunities but also conceals security threats, which we refer to as cyber shadows. These threats pose risks at individual, organizational, and societal levels. This paper examines the systemic impact of these cyber threats and proposes a comprehensive cybersecurity strategy that integrates AI-driven solutions, such as Intrusion Detection Systems (IDS), with targeted policy interventions. By combining technological and regulatory measures, we create a multilevel defense capable of addressing both direct threats and indirect negative externalities. We emphasize that the synergy between AI-driven solutions and policy interventions is essential for neutralizing cyber threats and mitigating their negative impact on the digital economy. Finally, we underscore the need for continuous adaptation of these strategies, especially in response to the rapid advancement of autonomous AI-driven attacks, to ensure the creation of secure and resilient digital ecosystems. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.09025 |
| By: | Verena Hess (UJML - Université Jean Moulin - Lyon 3 - Université de Lyon) |
| Abstract: | Donald Trump's election has not only driven up the price of bitcoin, it has also underlined the importance of the underlying and emerging blockchain technology for businesses across diverse sectors. Exploring new opportunities and exploiting existing ones are not easy to reconcile for these companies. This article seeks to clarify the link between innovation management and corporate organization, focusing on the work of project teams. It poses the following question: what organizational model can optimize value creation in the context of an influx of emerging technologies? Based on the results of a doctoral thesis, the article then develops a new understanding of an ambidextrous corporate structure. |
| Abstract: | L'élection de Donald Trump n'a pas seulement provoqué une hausse du prix du bitcoin, elle a également souligné l'importance de la technologie sous-jacente et émergente de la blockchain pour les entreprises de différents secteurs. L'exploration de nouvelles opportunités et l'exploitation de l'existant ne sont pas faciles à concilier pour ces entreprises. Cet article cherche à éclaircir le lien entre la gestion d'innovation et l'organisation d'une entreprise en mettant l'accent sur le travail d'équipes de projet. Il pose la question suivante : quel est le modèle organisationnel permettant d'optimiser la création de valeur dans un contexte d'afflux de technologies émergentes ? A partir des résultats d'une thèse de doctorat, l'article développe ensuite une nouvelle compréhension d'une structure d'entreprise ambidextre. |
| Keywords: | Banking, Innovation, Technologies, Ambidexterity, Teamwork |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04855611 |
| By: | Huang, Jiayi (Cardiff Business School); Zhou, Peng (Cardiff Business School) |
| Abstract: | Open innovation serves as a critical pathway for aligning Sustainable Business Models (SBMs) with the dual imperatives of the sustainable economy and the digital economy. This editorial review synthesizes insights from theoretical frameworks, particularly the Resource-Based View (RBV) and Transaction Cost Theory (TCT), integrated with the Technology-Organization-Environment (TOE) framework to explore the mechanisms driving open innovation. Our editorial review highlights key dimensions influencing open innovation: technology (digital platforms, emerging technologies like AI, IoT, and blockchain), organization (stakeholder collaboration, governance mechanisms), and environment (regulatory frameworks, market dynamics, and industrial spillovers). This unified framework offers actionable insights for policymakers to foster enabling ecosystems and for business leaders to adopt open innovation strategies for resource optimization and governance improvement. The review concludes that the RBV-TCT-TOE framework provides a generalizable and robust tool for understanding and advancing open innovation across industries and regions, bridging theoretical and practical dimensions to address the challenges of sustainability and digital transformation. |
| Keywords: | Open Innovation; Entrepreneurship; Sustainable Business Model |
| JEL: | O36 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2025/2 |
| By: | Jingfeng Chen; Wanlin Deng; Dangxing Chen; Luyao Zhang |
| Abstract: | Machine learning is critical for innovation and efficiency in financial markets, offering predictive models and data-driven decision-making. However, challenges such as missing data, lack of transparency, untimely updates, insecurity, and incompatible data sources limit its effectiveness. Blockchain technology, with its transparency, immutability, and real-time updates, addresses these challenges. We present a framework for integrating high-frequency on-chain data with low-frequency off-chain data, providing a benchmark for addressing novel research questions in economic mechanism design. This framework generates modular, extensible datasets for analyzing economic mechanisms such as the Transaction Fee Mechanism, enabling multi-modal insights and fairness-driven evaluations. Using four machine learning techniques, including linear regression, deep neural networks, XGBoost, and LSTM models, we demonstrate the framework's ability to produce datasets that advance financial research and improve understanding of blockchain-driven systems. Our contributions include: (1) proposing a research scenario for the Transaction Fee Mechanism and demonstrating how the framework addresses previously unexplored questions in economic mechanism design; (2) providing a benchmark for financial machine learning by open-sourcing a sample dataset generated by the framework and the code for the pipeline, enabling continuous dataset expansion; and (3) promoting reproducibility, transparency, and collaboration by fully open-sourcing the framework and its outputs. This initiative supports researchers in extending our work and developing innovative financial machine-learning models, fostering advancements at the intersection of machine learning, blockchain, and economics. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.16277 |
| By: | Christopher M. Hair; Sabrina T. Howell; Mark J. Johnson; Siena Matsumoto |
| Abstract: | Younger entrepreneurs are disadvantaged by traditional loan underwriting, which relies heavily on personal credit scores. With data from three fintech companies, we show that incorporating timely information about ability to repay from business checking account statements particularly improves default prediction performance for younger business owners. We develop a novel method to compare model predictions across subgroups—Tail Analysis for Comparative Outcomes (TACO)—which finds that switching from a Baseline (FICO-driven) model to a Cash Flow-enhanced model benefits younger entrepreneurs. We confirm this in causal analysis of approval decisions, showing that access to cash flow-intensive underwriting increases approval rates for younger vs. older entrepreneurs. |
| JEL: | G21 G23 G32 J14 J16 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33367 |
| By: | Bock, Carolin; Siebeneicher, Sven; Rockel, Jens |
| Abstract: | We explore the potentials of participative co-financing as a means for regional banks to integrate an innovative financing technique that enhances their strengths. Our goal is to interest platform operators, decision-makers of regional banks, and researchers in the potentials of participative co-financing. We define participative co-financing as capital provision, where professional financing sources provide one part, and the other is supplied via participative crowdfunding. We claim that crowdfunding and regional banks are compatible by common interests. We explore potentials emanating at the intersection of both fields by drawing on entrepreneurship and finance literature. Eventually, we bridge the gap between both fields of research. To guide our research, we develop a framework featuring the intersection of crowdfunding and regional banks. We ask: Which potentials affect the intentions of decision-makers in regional banks to offer participative co-financing? The technology acceptance model (TAM) provides a theoretical foundation for our analysis. We conduct a twofold analysis by looking at the direct effects of potentials first and acceptance according to the TAM second. Thereby we consider the intention to offer lending- and equity-based co-financing. We surveyed decision-makers from an association of German savings banks and derived 108 answers. We show that regional banks generally accept participative co-financing as an innovative financing technique. The most likely model is lending-based co-financing, with individual persons, startups, and SMEs as target groups. Decision-makers hope to profit from cross-selling and being perceived as innovative. Nevertheless, further research and trials are necessary to advance participative co-financing. |
| Date: | 2025–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:152425 |
| By: | Namrata Kala; Elizabeth Lyons |
| Abstract: | How managers frame the adoption of organizational practices may impact the returns to such practices, but managerial justification is often correlated with the use of particular practices or other dimensions of managerial quality. Using a randomized control trial, we study how the causal impacts of a frequently used monitoring management practice for remote work employers–digital worker surveillance–varies by randomly allocated justification for its use. In an online labor market, we divide workers into low and high-productivity performers, and randomize both whether surveillance is used and whether its use is justified based on the workers’ baseline productivity. We find that digital surveillance does not have significant effects on worker performance on average, but that not explaining the presence or elimination of digital surveillance based on worker performance significantly reduces worker output. Our results demonstrate a nuanced relationship between monitoring and worker performance that depends on how monitoring is rationalized to workers. |
| JEL: | J24 J28 J53 M54 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33348 |
| By: | Joxe, Ludovic |
| Abstract: | This article, in the form of a short essay, aims to discuss the evolution over the centuries of the role and social position of those mastering the technologies of their time. We suggest that the industrial revolution, the rationalization of technical and managerial processes, then the rise of IT, the ascent of cryptocurrencies and finally the emergence of the neo-liberal state have lifted a fringe of these individuals to the top of the social hierarchy. Among the “technology masters”, we distinguish three families: those who remain at the service of the State and the established order, those who have exploited, consciously or not, of the withdrawal of the neoliberal State to offer services and innovations formerly assumed by the public sector, and finally those who have consciously taken advantage of this same withdrawal and the recognition they enjoy in society to propose other models (free software, open source, cryptoanarchism, technical alternatives, etc.). |
| Date: | 2025–01–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ukr8e |