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on Payment Systems and Financial Technology |
| By: | Itay Goldstein; Ming Yang; Yao Zeng |
| Abstract: | We study competition between monies that provide separate payment and non-payment (e.g., store-of-value) functions. Our central insight is that payment adoption is governed not by absolute payment superiority, but by comparative advantage between payment and non-payment roles. A money that is “too good” as a store of value may circulate less as a payment instrument, even if it is technologically superior, because agents prefer to hoard it rather than spend it. The model delivers equilibria in which monies either specialize into distinct roles or coexist as payment instruments with one emerging as dominant. These mechanisms provide a unified microfoundation for classic monetary phenomena such as Gresham’s law and the big problem of small change, and offer a new perspective on modern debates over stablecoins and central bank digital currencies (CBDCs). Contrary to the common view that interest-bearing digital currencies necessarily threaten bank deposits, we show that higher yields can weaken payment adoption by raising the opportunity cost of spending. As a result, traditional bank deposits may coexist with, and even retain dominance over, technologically superior digital alternatives. |
| JEL: | E41 E42 E58 F33 G21 G23 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34865 |
| By: | Pavel Ciaian; d'Artis Kancs; Miroslava Rajcaniova |
| Abstract: | Around three quarters of Bitcoin transactions take place off-chain. Despite their significance, the vast majority of the empirical literature on cryptocurrencies focuses on on-chain transactions. This paper presents one of the first analysis of both on- and off-chain demand- and supply-side factors. Two hypotheses relating on-chain and off-chain demand and supply drivers to the Bitcoin price are tested in an ARDL model with daily data from 2019 to 2024. Our estimates document the differential contributions of on-chain and off-chain drivers on the Bitcoin price. Off-chain demand pressures have a significant impact on the Bitcoin price in the long-run. In the short-run, both demand and supply drivers significantly affect the Bitcoin price. Regarding transactions on the blockchain, only on-chain demand pressures are statistically significant - both in the long- and short-run. These findings confirm the dual nature of the Bitcoin price dynamics, where also market fundamentals affect the Bitcoin price in addition to speculative drivers. Bitcoin whale trading has less significant impact on price in the long-run, while is more pronounced contemporaneously and one-period lag. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.08429 |
| By: | Li, Yuxuan; Zhou, Yuqin; Huang, Jun; Xie, Lin; Huang, Hancheng |
| Abstract: | The approval of U.S.-based spot Bitcoin Exchange-Traded Funds (ETFs) in January 2024 marked a key milestone in the institutionalization of digital assets. This study examines how ETF introduction reshaped inter-asset dynamics in the cryptocurrency market. Using daily returns from January 2021 to September 2025 for Bitcoin and 18 major altcoins, we apply a Long Short-Term Memory (LSTM) neural network to capture evolving return correlations. Our analysis reveals a pronounced post-ETF decline in correlations across both short-term (6-month) and long-term (12-month) rolling windows. We interpret this structural decoupling as the effect of ‘independent inflows’, whereby institutional capital enters Bitcoin without proportionate investment in altcoins. The findings suggest that Bitcoin is evolving into a distinct, standalone asset class with weaker integration in the broader cryptocurrency market. Policy and investment implications include reconsidering portfolio diversification strategies, reassessing systemic risk, and designing digital asset financial instruments to account for market segmentation and institutional flows. |
| Keywords: | Bitcoin ETF; cryptocurrency markets; LSTM modeling; capital flows; asset decoupling; correlation dynamics; deep learning |
| JEL: | F3 G3 |
| Date: | 2026–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137306 |
| By: | Jong-Hee Hahn (Yonsei University); Seongkyun Kim (Software Policy & Research Institute) |
| Abstract: | This paper examines the welfare effects of most-favored-nation (MFN) clauses in markets where platforms not only act as intermediaries but also compete to offer auxiliary services such as delivery. Analyzing a linear demand model in which platforms set both transaction and service fees, we show that although MFNs intensify competition for service fees, their tendency to elevate transaction fees dominates, reducing aggregate transaction volume and thereby diminishing consumer surplus and overall welfare. This result holds for asymmetric platforms, provided all remain active in the market, and is robust to changes in the intensity of platform competition. |
| Keywords: | Online platform, MFNs, Price parity, Antitrust, Service competition |
| JEL: | L1 L4 D4 D8 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2026rwp-281 |
| By: | Joel Cariolle |
| Abstract: | This paper reviews the concepts, mechanisms, and empirical evidence on the diffusion of digital technologies (DTs) in developing economies, focusing on the distinct infrastructural layers of connectivity—from first-mile submarine cables to last-mile mobile and broadband networks. It examines how infrastructure gaps, usage disparities, and technological divides shape digitalization pathways and their socio-economic impacts, with a particular emphasis on lower-income regions like Sub-Saharan Africa. The analysis highlights how submarine cables reduce connectivity costs and expand Internet access, yet also reveals uneven benefits due to limited absorptive capacity and new digital vulnerabilities. By synthesizing evidence on rural mobile coverage, urban Internet spillovers, and trade integration, the paper emphasizes the need for coordinated policies to bridge digital divides and foster inclusive digital transformation. |
| Keywords: | Digital technologies, Connectivity, Internet, Mobile, Infrastructure, Submarine cable, Mobile networks, Africa |
| JEL: | O14 O33 L96 O55 F63 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wip:wpaper:96 |
| By: | Cheng, Jinjun |
| Abstract: | 1 Phantom of Value: Genealogical Critique and Diagnosis of Monetary Alienation 2 Collapse of Epistemology in Traditional Monetary Theory and Paradigmatic Confusion of Cryptocurrency in the Context of the Post-Scarcity Era 3 Foundational Stones of VCC Meta-Theory: Synergistic Constructionof Negative Entropy Anchoring, Consensus Computing, and Civilization Orientation, etc |
| Date: | 2026–02–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:thesis:sfuqe_v1 |
| By: | Murad Farzulla |
| Abstract: | We investigate whether cryptocurrency markets differentiate between infrastructure failures and regulatory enforcement at the return level, complementing a companion conditional variance analysis that finds 5.7 times larger volatility impacts from infrastructure events (p = 0.0008). Using event-level block bootstrap inference on 31 events across Bitcoin, Ethereum, Solana, and Cardano (2019-2025), we find no statistically significant difference in cumulative abnormal returns between infrastructure failures (-7.6%) and regulatory enforcement (-11.1%): the difference of +3.6 pp has p = 0.81 with 95% CI [-25.3%, +30.9%]. This null acquires substantive meaning alongside the companion's highly significant variance result: the same events that produce indistinguishable return responses generate dramatically different volatility signatures. Markets differentiate shock types through the risk channel -- the second moment -- rather than expected returns. The block bootstrap methodology, which resamples entire events to preserve cross-sectional correlation, reveals that prior parametric approaches systematically understate uncertainty by inflating degrees of freedom. Results are robust across eight specifications including permutation tests, leave-one-out analysis, and the Ibragimov-Mueller few-cluster test. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.07046 |
| By: | Samela Kivilo; Alex Norta; Marie Hattingh; Sowelu Avanzo; Luca Pennella |
| Abstract: | In recent years, tokenomic systems, decentralized systems that use cryptographic tokens to represent value and rights, have evolved considerably. Growing complexity in incentive structures has expanded the applicability of blockchain beyond purely transactional use. Existing research predominantly examines token economies within specific use cases, proposes conceptual frameworks, or studies isolated aspects such as governance, incentive design, and tokenomics. However, the literature offers limited empirically grounded, end-to-end guidance that integrates these dimensions into a coherent, step-by-step design approach informed by concrete token-economy development efforts. To address this gap, this paper presents the Token Economy Design Method (TEDM), a design-science artifact that synthesizes stepwise design propositions for token-economy design across incentives, governance, and tokenomics. TEDM is derived through an iterative qualitative synthesis of prior contributions and refined through a co-designed case. The artifact is formatively evaluated via the Currynomics case study and additional expert interviews. Currynomics is an ecosystem that maintains the Redcurry stablecoin, using real estate as the underlying asset. TEDM is positioned as reusable design guidance that facilitates the analysis of foundational requirements of tokenized ecosystems. The specificity of the proposed approach lies in the focus on the socio-technical context of the system and early stages of its design. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.09608 |
| By: | Mingyan Yang (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, SEU - Southeast University = Dongnan Daxue = 东南大学, Shandong Women's University [Jinan]); Zhengning Pu (SEU - Southeast University = Dongnan Daxue = 东南大学); Christophe Tavera (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); G Liu (CUEB - Capital University of Economics and Business) |
| Abstract: | The inquiry into whether the current surge in digital technology constitutes another emerging technological bubble holds important significance for both the progression of digital technology and the soundness of the financial sector. This study uses Chinese listed companies in the Shanghai and Shenzhen stock markets as samples to investigate the effect of digital transformation on the corporate financialization of entity enterprises and to explore its impact mechanism to elucidate whether ongoing digital technology advancement may be indicative of a potential technology bubble. The study revealed that digital transformation has a negative effect on corporate financialization. Specifically, digital transformation restricts corporate financialization by enhancing primary business operations, improving corporate R&D, and reducing corporate agency costs. Moreover, the study identifies property rights heterogeneity, policy support heterogeneity, regional heterogeneity and period heterogeneity in the impact of digital transformation on corporate financialization. The findings demonstrate that the current surge in digital technology significantly facilitates enterprise development, which is not a technology bubble. |
| Keywords: | Technology bubble, Digital transformation, Corporate financialization |
| Date: | 2026–01–11 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05504964 |
| By: | William N. Goetzmann; Dong Huang; Milad Nozari |
| Abstract: | NFTs provided an extraordinary real-time laboratory for bubble economics: returns were exceptionally right-skewed, illiquidity pervaded even the most active platforms, and a handful of trades drove aggregate performance. Investors extrapolating from realized returns without recognizing selection bias and survivorship faced a substantial risk of disappointment. As our data and simulations confirm, successful NFT investing during the bubble required an almost perfect confluence of timing, liquidity, and luck. |
| JEL: | D44 G11 Z11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34837 |
| By: | Rem Sadykhov; Geoff Goodell; Philip Treleaven |
| Abstract: | In this paper, we analyse the impacts of exogenous and endogenous factors on wealth distribution in the Bitcoin token economy, where wealth distribution refers to the distribution of BTC between economic participants or groups of economic participants. The objective of the paper is to analyse the impact of economic policies on wealth distribution in the Bitcoin ecosystem. Different macroeconomic and microeconomic time series are used to eliminate noise in the wealth distribution time series, and the causality analysis is performed between Bitcoin Improvement Proposals (i.e., BIPs) and the cleaned wealth distribution data to reveal possible patterns in the impacts that the endogenous policies have on wealth distribution in token economies. Lastly, a structure for economic policy taxonomy in token economies is proposed where different the policy implementations are illustrated by existing BIPs. This approach highlights the actions available to the policy makers, as well as providing a technique for analysis of policy impacts in token economies and their categorization. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.17373 |
| By: | Carsten Fink; Maria de las Mercedes Menéndez; Julio Raffo |
| Abstract: | Technology diffusion is central to economic development. This paper examines diffusion patterns for 31 technologies for 139 countries over two centuries, extending existing databases to include recent digital technologies and renewable energy technologies. Using cross-country panel regressions, we find that while adoption lags have declined from 50 years (pre-1950) to 15 years (post-2000), adoption intensity in developing economies remains at 53% of advanced economy levels. We document diverging intensity for older technologies but emerging convergence for post-2000 technologies, suggesting digital innovations may reduce the technology gap. These findings inform policies aimed at accelerating technology diffusion to developing economies. |
| Keywords: | Technology diffusion, Digital technologies, Adoption lag, Intensity of use |
| JEL: | O33 O47 O57 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wip:wpaper:91 |
| By: | António Afonso; Eduardo Rodrigues |
| Abstract: | Savings play a critical role in both individual financial well-being and economic development. This article examines the impact of financial literacy, income, educational level, and age on saving decisions across 136 countries, using data from the Global Financial Inclusion Database (2021) and employing Generalized Structural Equation Modelling (GSEM). Financial literacy is conceptualized as a latent variable, based on five indicators related to financial knowledge, financial behavior, and financial attitudes, aligned with the Organization for Economic Co-operation and Development (OECD) pillars. The analysis demonstrates that financial literacy is a fundamental driver for saving in the short and long term. Education level and income are consistent predictors of savings, while age exhibits distinct effects depending on the savings objective. Regional differences emerge, with Latin American countries showing the strongest link between financial literacy and savings, whereas in high-income economies, its influence is less pronounced. These findings underscore the multifaceted role of financial literacy in shaping saving decisions and highlight its implications for tailored public policies. |
| Keywords: | financial literacy, savings, Generalized Structural Equation Modelling, behavioral economics, global survey |
| JEL: | D14 G53 I22 C38 O16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12400 |
| By: | Julia Peter; Jana Schuetz |
| Abstract: | Financial literacy is an important prerequisite for making informed financial decisions, but it remains low, especially among women and older people. Internalized stereotypes can undermine confidence and subsequently affect behavior in financial matters, leading to suboptimal decisions. This paper investigates how stereotype salience affects confidence in financial literacy. In an information provision experiment, we inform respondents about age or gender differences in numeracy to examine the impact on financial literacy, confidence, hypothetical investment and saving decisions, and demand for information and education. We find that being informed about age differences has no significant effect. In contrast, being informed about gender differences increases the confidence of male respondents through a stereotype boost, while leaving female respondents largely unaffected. |
| Keywords: | survey experiment, numeracy, gender stereotypes, age stereotypes |
| JEL: | C90 D91 G53 I24 J16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12384 |