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on Payment Systems and Financial Technology |
| By: | Khalid Lahrour (UH2C - Université Hassan II de Casablanca = University of Hassan II Casablanca = جامعة الحسن الثاني (ar)); Latifa Horr (UH2C - Université Hassan II de Casablanca = University of Hassan II Casablanca = جامعة الحسن الثاني (ar)) |
| Abstract: | Financial inclusion refers to providing financial products and services to households and small businesses that were previously excluded, as a means of promoting more inclusive growth. This includes access to savings, investment, consumption smoothing, and insurance. Fintech is the use of software, applications, and digital platforms to provide financial services to consumers and businesses through digital devices like smartphones. It has gained recognition as a promising way to promote financial inclusion. This paper examines the impact of financial technology (fintech) on financial inclusion through a literature review following the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) to identify the ways in which fintech contributes to and can potentially contribute to increased financial inclusion. The paper provides a brief history of fintech, reviews the literature on fintech and financial inclusion, and discusses how fintech can increase access to financial services, promote financial literacy and consumer protection, and support the growth of micro and small enterprises. The paper concludes with empirical evidence on the impact of fintech on financial inclusion. |
| Keywords: | Fintech Financial inclusion Digital finance Innovation Systematic review. Classification JEL: G23 Paper type: Theoretical Research, Fintech, Financial inclusion, Digital finance, Innovation, Systematic review |
| Date: | 2025–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05137071 |
| By: | Sriram Darbha; Cyrus Minwalla; Rakesh Arora; Dinesh Shah |
| Abstract: | We frame the wide spectrum of possible system architectures for an online retail central bank digital currency (CBDC) and identify a promising architecture well-suited for basic payments. We select OpenCBDC 2PC, a representative system design that fits this architecture and analyze it using a range of criteria to assess the feasibility of such system designs. Our analysis, augmented with lab experiments, focuses on retail payment systems with two-tier deployment and includes a detailed assessment of non-repudiation, integrity of the monetary supply, privacy, compliance, scalability of performance and resilience of the system state. It suggests that such system designs can be fast and cheap for basic payments, with high privacy, although some areas such as integration with retail payments systems, performance of auditing and resilience of the core system state require further investigation. Our framing highlights other promising architectures for an online retail CBDC, whose analysis we leave as an area for further exploration. |
| Keywords: | Central bank research; Digital currencies and fintech |
| JEL: | E E4 E42 E5 E51 O O3 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocadp:25-09 |
| By: | Myles, Jamieson |
| Abstract: | Financial technology (fintech) innovations have the potential to disrupt traditional banking by unbundling banking, money, and payments. However, the impact on the cross-border payments system—which still relies on correspondent banking networks—remains uncertain. This uncertainty partly stems from a historical focus in the literature on cash clearing over credit. Challenging this distinction, this article explores the role of credit in correspondent banking and international payments. A longue durée perspective on cashless payments reveals the deep-rooted importance of credit in the cross-border payment system and highlights correspondent banks’ role in providing it. Changes in bank-intermediated trade finance practices during and after World War I reshaped the London-based correspondent banking network. Furthermore, cash clearing and credit operations remained remarkably congruent until at least the 1980s, as reflected in banks’ internal organisation, reporting, and bankers’ own descriptions of the payment system. This article argues that adopting a definition of payment system infrastructure that integrates both dimensions is essential to understanding how correspondent banking has facilitated international liquidity provision. It also suggests that relying on fintech firms, rather than banks, to provide this elastic payment infrastructure could amount to jumping out of the frying pan and into the fire. |
| Keywords: | Correspondent banking, Payment systems, Infrastructure, Banking history |
| JEL: | N00 N10 N20 B52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gnv:wpaper:unige:186604 |
| By: | Hongzhe Wen; Songbai Li |
| Abstract: | With market capitalization exceeding USD 200 billion as of early 2025, stablecoins have evolved from a crypto-focused innovation into a vital component of the global monetary structure. This paper identifies the characteristics of stablecoins from an analytical perspective and investigates the role of stablecoins in forming hybrid monetary ecosystems where public (fiat, CBDC) and private (USDC, USDT, DAI) monies coexist. Through econometric analysis with multiple models, we find that stablecoins maintain strong peg stability, while each type also exhibiting distinctive responses to market variables such as trading volume and capitalization, depending on the mechanisms behind. We introduce a hybrid system design that proposes a two-layer structure where private stablecoin issuers are backed by central bank reserves, ensuring uniformity, security, and programmability. This model merges the advantages of decentralized finance and payment innovation while utilizing the Federal Reserve's institutional trust. A case study on the 2023 SVB-USDC depeg event illustrates how such a hybrid system could prevent panic-induced instability through transparent reserves, secured liquidity, and interoperable assets. Ultimately, this research concludes that a hybrid monetary model not only enhances financial inclusivity, scalability, and dollar utility in digital ecosystems but also strengthens systemic resilience, offering a credible blueprint for future digital dollar architectures. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.10997 |
| By: | Rachid Maghniwi (UM5 - Université mohamed 5, Rabat); Mustapha Oukassi (UM5 - Université mohamed 5, Rabat) |
| Abstract: | This research examines the transformational impact of financial technologies (Fintech) and artificial intelligence (AI) on the Moroccan banking sector, particularly in retail banking services. In a context of rapid evolution of the global financial landscape, Moroccan banks face major challenges in maintaining their competitiveness while meeting new consumer expectations. This study quantitatively analyzes the adoption of Fintech and AI solutions by Moroccan banks, drawing on data from Bank Al-Maghrib and major financial institutions in the country over the period 2018-2023. The results reveal a significant correlation between investment in financial technologies and improved bank operational performance, while highlighting obstacles specific to the Moroccan context, particularly in terms of technological infrastructure and regulatory adaptation |
| Abstract: | Cette recherche examine l'impact transformationnel des technologies financières (Fintech) et de l'intelligence artificielle (IA) sur le secteur bancaire marocain, particulièrement dans le domaine des services aux particuliers. Dans un contexte d'évolution rapide du paysage financier mondial, les banques marocaines font face à des défis majeurs pour maintenir leur compétitivité tout en répondant aux nouvelles attentes des consommateurs. Cette étude analyse quantitativement l'adoption des solutions Fintech et de l'IA par les banques marocaines, en s'appuyant sur les données de Bank Al-Maghrib et des principales institutions financières du pays sur la période 2018-2023. Les résultats révèlent une corrélation significative entre l'investissement dans les technologies financières et l'amélioration de la performance opérationnelle des banques, tout en soulignant les obstacles spécifiques au contexte marocain, notamment en termes d'infrastructure technologique et d'adaptation réglementaire. |
| Keywords: | Fintech, AI, Banking Services, Digital Transformation, Financial Inclusion, Fintech IA Services bancaires, Transformation digitale, IA, Services bancaires, Inclusion financière Fintech |
| Date: | 2025–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05145200 |
| By: | Éric Darmon (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Thomas Le Texier (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Zhiwen Li (Southeast University [Jiangsu]); Thierry Pénard (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Antitrust authorities are concerned with the dominant market position of Tech Giants such as Google, Meta, or Amazon. These digital conglomerates are characterized by platform-based business models and multimarket contact (MMC). In traditional one-sided markets, theory and empirical evidence show that MMC tends to relax competition. In this paper, we revisit this result in the context of platform competition with competitive bottleneck and cross-market externalities, and provide new insights into the impact of MMC on platform competition. In this context, when platforms charge the two groups of users (bilateral pricing), we find that MMC always decreases the profitability of platforms regardless of the nature and magnitude of cross-market externalities. Then we consider the case in which platforms can only charge one group of users (unilateral pricing). When platforms charge the side on which they are not directly competing for users (i.e. the side that is not the competitive bottleneck), MMC may relax competition only if cross-group externalities and cross-market externalities are both sufficiently small. From a competition policy perspective, our paper provides insights into how antitrust authorities should review conglomerate mergers in digital markets and assesses the effects of the diversification strategies of digital platforms in the context of cross-market externalities and competitive bottleneck. |
| Keywords: | Two-sided markets, Platform competition, Digital markets, Multimarket contact, Cross-market externalities, Competitive bottleneck, Competition policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05107385 |
| By: | Byoung Hwa Hwang |
| Abstract: | The consumer payments landscape is rapidly evolving. In the United States, the growth of instant payments and innovations such as open banking are among the many developments shaping today's consumer payment behaviors. |
| Date: | 2025–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-07-07-2 |
| By: | Michael S. Barr |
| Date: | 2025–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgsq:101312 |
| By: | Pietro Saggese; Michael Fr\"owis; Stefan Kitzler; Bernhard Haslhofer; Raphael Auer |
| Abstract: | Total Value Locked (TVL) aims to measure the aggregate value of cryptoassets deposited in Decentralized Finance (DeFi) protocols. Although blockchain data is public, the way TVL is computed is not well understood. In practice, its calculation on major TVL aggregators relies on self-reports from community members and lacks standardization, making it difficult to verify published figures independently. We thus conduct a systematic study on 939 DeFi projects deployed in Ethereum. We study the methodologies used to compute TVL, examine factors hindering verifiability, and ultimately propose standardization attempts in the field. We find that 10.5% of the protocols rely on external servers; 68 methods alternative to standard balance queries exist, although their use decreased over time; and 240 equal balance queries are repeated on multiple protocols. These findings indicate limits to verifiability and transparency. We thus introduce ``verifiable Total Value Locked'' (vTVL), a metric measuring the TVL that can be verified relying solely on on-chain data and standard balance queries. A case study on 400 protocols shows that our estimations align with published figures for 46.5% of protocols. Informed by these findings, we discuss design guidelines that could facilitate a more verifiable, standardized, and explainable TVL computation. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.14565 |
| By: | Sabrina Aufiero; Antonio Briola; Tesfaye Salarin; Fabio Caccioli; Silvia Bartolucci; Tomaso Aste |
| Abstract: | This paper investigates the evolving link between cryptocurrency and equity markets in the context of the recent wave of corporate Bitcoin (BTC) treasury strategies. We assemble a dataset of 39 publicly listed firms holding BTC, from their first acquisition through April 2025. Using daily logarithmic returns, we first document significant positive co-movements via Pearson correlations and single factor model regressions, discovering an average BTC beta of 0.62, and isolating 12 companies, including Strategy (formerly MicroStrategy, MSTR), exhibiting a beta exceeding 1. We then classify firms into three groups reflecting their exposure to BTC, liquidity, and return co-movements. We use transfer entropy (TE) to capture the direction of information flow over time. Transfer entropy analysis consistently identifies BTC as the dominant information driver, with brief, announcement-driven feedback from stocks to BTC during major financial events. Our results highlight the critical need for dynamic hedging ratios that adapt to shifting information flows. These findings provide important insights for investors and managers regarding risk management and portfolio diversification in a period of growing integration of digital assets into corporate treasuries. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.14655 |
| By: | Tunç, Murat (Tilburg University, School of Economics and Management); Cavusoglu, Hasan; Zheng, Zhiqiang (Eric) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:5a43b90c-1d93-4c4e-a76b-b005440e5d14 |
| By: | Davide Consoli; Francesco Lelli; FSandro Montresor; Francois Perruchas; Francesco Rentocchini |
| Abstract: | Given the crucial role of Venture Capital (VC) in financing the green transition, and its uneven geographical distribution, we examine how the proximity of VC investors to green start-ups influences the success of their deals. Considering the intrinsically higher risk profile of start-ups in the greensector, we maintain that their spatial proximity to VC investors will have a larger effect here than in other sectors. Furthermore, considering recent advancements in the digitalization of VC, we also argue that a digital kind of proximity between investors and green investees in accessing digital technologies (platforms) could matter for that, by also reducing the binding effect of spatial proximity on the success of VC green deals. Using data from Dealroom, and combining them with the SpeedTest open dataset by Ookla, we test for these arguments with respect to a large sample of about 12, 000 green start-ups, originally identified by combining multiple methods (text scraping, topic modelling, and machine learning), located in 27 EU (+3) countries from 2000 to 2020. Econometric estimates at the level of realised vs. potential VC green deals confirm that spatial proximity is more relevant for green than for non-green start-ups. The new quasi- dyadic indicator of digital proximity that we propose does also significantly and positively correlates with the actual occurrence of green deals, and negatively moderate the effect of spatial proximity, supporting our argument of a substitution relationship between the two. Policy implications are drawn accordingly. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2521 |
| By: | Ilyas Ahnach (FSJES Agdal, Université Mohammed V Rabat, Maroc - Laboratoire d’économie appliquée en sciences économiques (LEA)); Said Tounsi |
| Abstract: | L'intégration de la technologie blockchain sur le marché financier promet un véritable développement du marché. Elle peut transformer l'organisation et le fonctionnement du marché, en créant un système décentralisé et distribué qui apporte plus de transparence et de sécurité nécessaire au développement du marché financier. L'objectif principal de ce papier est alors d'analyser si l'intégration de la technologie blockchain améliore la résilience du marché financier, en prenant le cas de la Bourse de Casablanca. La méthode utilisée est une analyse comparative entre la résilience du marché financier et celle de la blockchain en utilisant les réponses impulsionnelles du modèle VAR (TVP-VAR). Les deux évènements choisis pour analyser la résilience sont la période du Covid-19 et de la guerre Russe-Ukraine. Les résultats de l'étude démontrent alors clairement que la technologie blockchain permet un retour à l'équilibre plus rapidement après la survenance d'un choc et son intégration sur le marché améliorera sa résilience. |
| Keywords: | Blockchain, résilience, système décentralisé, Covid-19 |
| Date: | 2025–06–22 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05135043 |
| By: | Michelle W. Bowman |
| Date: | 2025–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgsq:101311 |
| By: | Laura Felber |
| Abstract: | This paper examines the effects of exchange rate fluctuations on cross-border consumer spending in small open economies. Exploiting a large, unexpected and persistent central bank-induced exchange rate appreciation and drawing on a unique dataset of over 500 million anonymized debit and credit card transactions, I document a substantial and immediate impact on both cross-border shopping by domestic consumers and tourism spending by foreign consumers. The strongest spending adjustments are observed among domestic consumers living near the border and foreign consumers from neighboring countries. Furthermore, foreign consumers from neighboring countries exhibit high exchange rate sensitivity on both the extensive and intensive margins and shift their consumption from higher- to lower-value goods and services. These findings suggest significant substitution effects in consumption on impact and emphasize the important role of cross-border shopping in small open economies. The paper provides insights for policymakers and central bankers, especially in small open economies where the exchange rate channel is an important channel of monetary policy transmission. |
| Keywords: | Exchange rates, Consumption, Monetary policy, Exchange rate channel, Heterogeneity, Transaction payments data, Tourism, Event study |
| JEL: | D12 E21 E52 E58 F14 F41 R11 Z30 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:snb:snbwpa:2025-09 |
| By: | Accominotti, Olivier; Lucena-Piquero, Delio; Ugolini, Stefano |
| Abstract: | This article studies the impact of intermediaries’ disappearance on firms’ access to the sterling money market during the first globalization era of 1880-1914. We propose a new methodology to assess intermediaries’ substitutability in financial networks featuring higher-order structures (credit intermediation chains). We represent the financial network as a hyperstructure and each credit intermediation chain as a hyperedge. This approach allows us to assess how the failure of intermediaries affects network connectivity. We apply this methodology to a unique dataset documenting the network structure of the sterling money market in the year 1906. Our results reveal that the failure of individual money market actors could only cause limited damage to the network as intermediaries were highly substitutable. These findings suggest that an international financial network without highly systemic nodes can emerge even at a time of global economic integration. |
| Keywords: | bills of exchange; financial networks; hypergraphs; hyperstructures; intermediation chains; systemic risk |
| JEL: | D85 E42 F30 G20 N20 |
| Date: | 2023–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:119896 |
| By: | Lennart Ante; Aman Saggu; Ingo Fiedler |
| Abstract: | Stablecoins represent a critical bridge between cryptocurrency and traditional finance, with Tether (USDT) dominating the sector as the largest stablecoin by market capitalization. By Q1 2025, Tether directly held approximately $98.5 billion in U.S. Treasury bills, representing 1.6% of all outstanding Treasury bills, making it one of the largest non-sovereign buyers in this crucial asset class, on par with nation-state-level investors. This paper investigates how Tether's market share of U.S. Treasury bills influences corresponding yields. The baseline semi-log time trend model finds that a 1% increase in Tether's market share is associated with a 1-month yield reduction of 3.8%, corresponding to 14-16 basis points. However, threshold regression analysis reveals a critical market share threshold of 0.973%, above which the yield impact intensifies significantly. In this high regime, a 1% market share increase reduces 1-month yields by 6.3%. At the end of Q1 2025, Tether's market share placed it firmly within this high-impact regime, reducing 1-month yields by around 24 basis points relative to a counterfactual. In absolute terms, Tether's demand for Treasury Bills equates to roughly $15 billion in annual interest savings for the U.S. government. Aligning with theories of liquidity saturation and nonlinear price impact, these results highlight that stablecoin demand can reduce sovereign funding costs and provide a potential buffer against market shocks. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.12413 |
| By: | Erin E. Syron Ferris; Amy Rose; Manjola Tase |
| Abstract: | We first construct a novel indicator of reserve ampleness based on data on interbank payments over the Fedwire Funds Service: the share of reserves to Fedwire payments as a proxy for the demand for reserves for payment purposes. We then explore the relationship between this indicator and the price of reserves, the spread between the effective federal funds rate (EFFR) and interest on reserves (IORB), to identify structural breaks and back out the minimum level of ample reserves as a share of Fedwire payments and the corresponding EFFR - IORB spread. We find that fed funds trading slightly below the interest on reserves and reserves at about 65 percent of Fedwire payments are consistent with minimum level of ample reserves. |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-07-18-3 |
| By: | Cameron Cornell; Lewis Mitchell; Matthew Roughan |
| Abstract: | Causal networks offer an intuitive framework to understand influence structures within time series systems. However, the presence of cycles can obscure dynamic relationships and hinder hierarchical analysis. These networks are typically identified through multivariate predictive modelling, but enforcing acyclic constraints significantly increases computational and analytical complexity. Despite recent advances, there remains a lack of simple, flexible approaches that are easily tailorable to specific problem instances. We propose an evolutionary approach to fitting acyclic vector autoregressive processes and introduces a novel hierarchical representation that directly models structural elements within a time series system. On simulated datasets, our model retains most of the predictive accuracy of unconstrained models and outperforms permutation-based alternatives. When applied to a dataset of 100 cryptocurrency return series, our method generates acyclic causal networks capturing key structural properties of the unconstrained model. The acyclic networks are approximately sub-graphs of the unconstrained networks, and most of the removed links originate from low-influence nodes. Given the high levels of feature preservation, we conclude that this cryptocurrency price system functions largely hierarchically. Our findings demonstrate a flexible, intuitive approach for identifying hierarchical causal networks in time series systems, with broad applications to fields like econometrics and social network analysis. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.12806 |
| By: | Vincent Gobin (IHD - Institut d'histoire du droit Jean Gaudemet - CNRS - Centre National de la Recherche Scientifique - Université Paris-Panthéon-Assas) |
| Keywords: | Crypto-actifs, Cryptomonnaies, Monnaies digitales |
| Date: | 2025–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05158065 |