nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2025–04–28
thirteen papers chosen by
Bernardo Bátiz-Lazo, Northumbria University


  1. A New Era of Entrepreneurial Finance? Venture Tokenization and Public Markets for Startups By Johannes Fuchs; Paul P. Momtaz
  2. Helping Female Entrepreneurs Access Digital Platforms By Sophia Friedson-Ridenour; Kinfe Edey
  3. The offline digital euro and holding limits: a user-centred approach By Frank van der Horst; Anneloes van Gent
  4. Could Digital Currencies Lead to the Disappearance of Cash from the Market? By Mr. Marco Pani; Mr. Rodolfo Maino
  5. Why Are Credit Card Rates So High? By Itamar Drechsler; Hyeyoon Jung; Weiyu Peng; Dominik Supera; Guanyu Zhou
  6. How will the digital euro work? A preliminary analysis of design, structures and challenges By Brühl, Volker
  7. Prometheus Unbound: What Makes Fintech Grow? By Mr. Serhan Cevik
  8. The Limits of Media See-Saws: Ad-Funded Platform Mergers Can Harm Both Sides By Shiva Shekhar; Radostina Shopova
  9. Privacy Technologies & The Digital Economy By Parma Bains; Tamas Gaidosch
  10. Determinantes del precio del Bitcoin. Un análisis econométrico utilizando modelos VAR By Donato, Santiago Andrés
  11. Institutional and Procurement Practice Note on Cloud Computing By World Bank
  12. Can Remittances Drive Inclusive Human Development in Sub-Saharan Africa? By Yao, Koffi Yves; Kouakou, Auguste Konan
  13. AI, Fintechs, and Banks: A speech at the Federal Reserve Bank of San Francisco, San Francisco, California., April 4, 2025 By Michael S. Barr

  1. By: Johannes Fuchs; Paul P. Momtaz
    Abstract: After initial coin offerings (ICOs), decentralized digital platforms (DDPs) decide whether to go public or remain private. We explore the implications of the public-versus-private decision for the growth and decentralization of DDPs. Employing a difference-in-differences framework, we find that public DDPs scale faster post-listing relative to matched private DDPs. An important driver behind public DDPs’ superior growth is a spillover effect of financial speculation on fundamental platform activity, especially when DDPs are undervalued, hastening network effects. The going-public decision also facilitates DDP decentralization, although this stems mostly from the left tail of the token ownership distribution, while blockholders largely remain in control. Exploring the trade-off between going public through token exchange listings and remaining private with the help of institutional investors, we find that crypto fund-endorsed token listings yield more platform growth than unendorsed listings, while crypto fund backings without listings create the least value. Overall, our study suggests that early-stage startups may economically benefit from tokenization and creating liquid markets for venture tokens.
    Keywords: entrepreneurial finance, decentralized platforms, tokenization, blockchain technology
    JEL: G24 G32 K22 L26
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:ces:ceswps:_11760
  2. By: Sophia Friedson-Ridenour; Kinfe Edey
    Keywords: Gender-Gender and Economics Information and Communication Technologies-Digital Divide
    Date: 2023–03
    URL: https://d.repec.org/n?u=RePEc:wbk:wboper:39510
  3. By: Frank van der Horst; Anneloes van Gent
    Abstract: The national central banks of the Eurosystem are investigating the possibility of issuing a retail central bank digital currency (CBDC) – the digital euro – alongside cash. The digital euro would be subject to a holding limit, meaning there would be limit to the amount of digital euro an individual can hold. A holding limit would prevent excessive outflows from the banking system, which could endanger financial stability. For the offline digital euro, a specific consideration for setting a holding limit is also to mitigate anti-money laundering/ countering the financing of terrorism (AML/CFT) risks. At the same time, given that the digital euro is a public means of payment, it is important that everyone is able to use it. A holding limit should therefore not hamper the usability of the digital euro. In existing research on CBDC, this user-centred perspective to holding limits has received limited attention. The added value of this study lies in taking a user-centred perspective. De Nederlandsche Bank conducted an experiment on offline digital euro holding limits among 2, 000 adult participants in the Netherlands.
    Date: 2025–04
    URL: https://d.repec.org/n?u=RePEc:dnb:dnbocs:2502
  4. By: Mr. Marco Pani; Mr. Rodolfo Maino
    Abstract: Private and public agents’ plans and actions to introduce digital currencies and other innovative payment instruments could produce some unintended consequences, including the potential disappearance of physical cash. This study employs a two-sided market model to examine how payment systems might respond to new currencies. Numerical simulations indicate that the success of a new currency hinges on a large-scale launch. However, even unsuccessful attempts could disrupt existing systems, potentially resulting in the elimination of cash. If cash plays a critical role as a safeguard, regulatory and monetary authorities should give due consideration to ensure its continued availability when payment innovations are introduced.
    Keywords: Payment systems; two-sided markets; digitalization; digital currencies; technological innovation
    Date: 2025–03–21
    URL: https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/056
  5. By: Itamar Drechsler; Hyeyoon Jung; Weiyu Peng; Dominik Supera; Guanyu Zhou
    Abstract: Credit cards play a crucial role in U.S. consumer finance, with 74 percent of adults having at least one. They serve as the main method of payment for most individuals, accounting for 70 percent of retail spending. They are also the primary source of unsecured borrowing, with 60 percent of accounts carrying a balance from one month to the next. Surprisingly, credit card interest rates are very high, averaging 23 percent annually in 2023. Indeed, their rates are far higher than the rates on any other major type of loan or bond. Why are credit card rates so high? In our recent research paper, we address this question using granular account-level data on 330 million monthly credit card accounts.
    Keywords: credit cards; banking; asset pricing
    JEL: G12 G21 G51 E02
    Date: 2025–03–31
    URL: https://d.repec.org/n?u=RePEc:fip:fednls:99751
  6. By: Brühl, Volker
    Abstract: The digital euro project will reach an important milestone this year when the preparation phase ends and the governing council of the ECB will decide whether to enter the next phase before the launch phase. This article provides an overview on how a digital euro is intended to work. An examination of the prospective design features and architecture of the digital euro reveals the complexity of the project and the challenges associated with integrating the digital euro into the existing payment landscape.
    JEL: E42 E51 G21
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:zbw:cfswop:315474
  7. By: Mr. Serhan Cevik
    Abstract: The rise of financial technologies—fintech—could have transformative effects on the financial landscape, expanding the reach of services beyond the confines of geography and creating new competitive sources of finance for households and firms. But what makes fintech grow? Why do some countries have more financial innovation than others? In this paper, I use a comprehensive dataset to investigate the emergence and spread of fintech in a diverse panel of 98 countries over the period 2012–2020. This empirical analysis helps ascertain economic, demographic, technological and institutional factors that enable the development of fintech. The magnitude and statistical significance of these factors vary according to the type of fintech instrument and the level of economic development (advanced economies vs. developing countries). Finally, these findings reveal that policies and structural reforms can help promote financial innovation and cultivate fintech ventures—particularly by strengthening technological and institutional infrastructures and reducing cybersecurity threats.
    Keywords: Fintech; financial innovation; technological change
    Date: 2025–02–21
    URL: https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/044
  8. By: Shiva Shekhar; Radostina Shopova
    Abstract: We study the welfare effects of a merger between ad-funded platforms facing elastic consumer demand. We show that advertising fees as well as quality investment levels by the platforms fall post-merger. Interestingly, despite the lower advertising fees, advertisers may be worse off when their value of interacting with consumers is high enough. The intuition for this result is that the decrease in quality investments post-merger reduces overall consumer participation. Thus, studying innovation incentives is important in these ad-funded markets as the well-known surplus see-saw result may not hold making both sides of the markets worse while the merged entity emerges as the sole winner.
    Keywords: Ad-funded platforms, two-sided markets, horizontal mergers, innovation, quality.
    JEL: D42 D43 L12 L13 L22 L86
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:ces:ceswps:_11768
  9. By: Parma Bains; Tamas Gaidosch
    Abstract: Ensuring that users and society-at-large derive the maximum benefit from digital technology requires active and open participation in the digital economy. However, such participation is not without risks and users may withhold or withdraw their active participation in response to such factors. One important reason for doing so is users’ privacy concerns, which may induce behavior that limits digital footprints in order to shield personal data from third parties and governments. Coupled with regulation, privacy technologies can help build trust in the digital economy. If designed and deployed appropriately, they could form the basis of trust in the digital economy. We offer three considerations for supervisors. First, they should understand the strengths and weaknesses of privacy technologies, and this primer aims to provide a foundational tool to achieve this. Second, domestic collaboration and international cooperation is indispensable to improving knowledge sharing and providing clarity regarding mandates and rules. Third, they need to understand the cybersecurity implications and tradeoffs in using privacy technologies.
    Keywords: Fintech; cyber; digital; privacy; PET; regulation; supervision; encryption; cryptography
    Date: 2025–03–28
    URL: https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/060
  10. By: Donato, Santiago Andrés
    Abstract: Esta investigación tiene como objetivo analizar los determinantes del comportamiento del precio del Bitcoin mediante la aplicación de un modelo VAR que incluye variables macroeconómicas y del mercado del Bitcoin. A través de este análisis, se busca identificar y evaluar la importancia relativa de cada uno de estos factores en la evolución del precio del Bitcoin, y examinar cómo se interrelacionan estos componentes en el contexto del mercado de las criptomonedas. Los resultados obtenidos sugieren que existen relaciones causales significativas entre el precio del Bitcoin y algunas variables macroeconómicas y del mercado del Bitcoin. Además, las relaciones encontradas apoyan parcialmente algunas de las hipótesis planteadas, lo que sugiere que el precio del Bitcoin está influenciado por factores tanto internos como externos al mercado de las criptomonedas.
    Keywords: Criptoactivos; Volatilidad; Precios; Análisis Econométrico;
    Date: 2023–09–27
    URL: https://d.repec.org/n?u=RePEc:nmp:nuland:4262
  11. By: World Bank
    Keywords: Information and Communication Technologies-Information Technology Information and Communication Technologies-Information Security & Privacy
    Date: 2023–03
    URL: https://d.repec.org/n?u=RePEc:wbk:wboper:39549
  12. By: Yao, Koffi Yves; Kouakou, Auguste Konan
    Abstract: This paper analyses the effect of remittances on inclusive human development in sub-Saharan Africa. It considers the conditional effects of ICT, dual nationality, and financial development within this relationship. Estimates were derived using Population-Averaged Generalised Estimating Equations (PA-GEE), Fixed Effects Instrumental Variable (FEIV), and Method of Moments-Quantile Regression (MM-QR) on a panel of 31 countries over the period 2010–2017. The findings indicate that remittances positively contribute to inclusive human development. The interaction between remittances, financial development, and ICT further enhances this impact, as does dual citizenship. These results are robust and suggest that ICT through collaboration between migrants and their country of origin, laws favouring multiple citizenship, an efficient financial system and a business-friendly institutional environment, optimises the effect of remittances on inclusive development in sub-Saharan Africa.
    Keywords: Remittances, Inclusive Development, Human Development, Transnationalism, Sub-Saharan Africa
    JEL: F24 K37 O15 O33 O55
    Date: 2025–02–19
    URL: https://d.repec.org/n?u=RePEc:pra:mprapa:123713
  13. By: Michael S. Barr
    Date: 2025–04–04
    URL: https://d.repec.org/n?u=RePEc:fip:fedgsq:99782

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