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on Payment Systems and Financial Technology |
| By: | Bernhard Reinsberg |
| Abstract: | Since the Global Financial Crisis, money has been undergoing transformational changes. Cryptocurrencies like Bitcoin and the lesser-known stablecoins, powered by blockchain technology, have grown rapidly, allowing people to undertake financial transactions globally without central intermediaries. In addition, many countries have explored central bank digital currencies, which are digital representations of fiat monies controlled by national central banks. While descriptive studies on these money innovations abound, systematic analysis of their drivers is lacking. This paper offers the first systematic analysis of the conditions under which societies adopt these money innovations. Based on an original cross-country dataset capturing the extent to which money innovations have been deployed, regression analysis shows limited overlap in the significant drivers of these money innovations, aside from fundamental country characteristics including level of development, population size, and (to a lesser extent) regime type. Cryptocurrency use appears to be driven by macro-financial instability and lack of access to bank finance. In contrast, CBDC adoption by states appears to be driven by exposure to sanctions and previous experimentation with CBDC projects. While confirming the role of financial inclusion for cryptocurrency adoption, the findings partly challenge the official discourse of financial inclusion as a key motivation for CBDC adoption. |
| Keywords: | Digital money, cryptocurrency, central bank digital currency (CBDC), money innovations, cross-country analysis |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cbr:cbrwps:wpt202601 |
| By: | Samuel J. Hempel; JP Perez-Sangimino; Jessie Jiaxu Wang |
| Abstract: | The expansion of stablecoins has moved digital payment tokens from the periphery of financial markets to the center of policy discussions. With a global market capitalization in the mid-hundreds of billions of dollars and annual settlement volumes in the trillions as of 2025, stablecoins are increasingly viewed not merely as crypto‐market infrastructure but as potential competitors to traditional transaction accounts, particularly in payment processing, settlement functionality, and as short-term stores of value for transaction balances. |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:103193 |
| By: | Hung Q. Tran |
| Abstract: | The passage of the US Genius Act in July 2025 has spurred the growth of stablecoins, mostly dollar-based, helping to modernize and improve payment transactions. The market capitalization of stablecoins increased rapidly to $317 billion in April 2026 and is expected to grow to $3-4 trillion by 2030. While still modest in scale, stablecoins—if fully developed, especially in the face of potentially strong competition from tokenized bank deposits—could have multifaceted effects on the economy and monetary system, both positive and negative, though these remain not yet well understood. Policymakers and market participants should be aware of these potential effects in order to realize the benefits while guarding against the risks of stablecoins. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb26_26 |
| By: | Jens-Uwe Franck; Martin Peitz |
| Abstract: | This contribution examines Heike Schweitzer’s role as a competition policy analyst and adviser in the formative phase of European competition policy towards digital platforms. It situates her work in this context and develops a conceptual framework that captures the challenges of analysis under conditions of uncertainty and dynamic market developments. Through a selective analysis of four key reports, the article reconstructs central analytical approaches and policy proposals, identifies characteristic features of a “Heike Schweitzer approach”, and assesses its influence on subsequent regulatory developments, in particular the Digital Markets Act and section 19a of the German Competition Act. |
| Keywords: | antitrust law, digital platform, Digital Markets Act, German competition law, platform regulation |
| JEL: | K21 K23 K20 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_745 |
| By: | Us-Salam, Danish (Central Bank of Ireland); Jose, Anu (Central Bank of Ireland, University of Galway); Kelly, Jane (Central Bank of Ireland) |
| Abstract: | Fraud and scams are an increasingly complex and global challenge, yet evidence on their impact on individuals remains limited. Using a broadly nationally representative survey of nearly 3, 000 adults in Ireland, this study maps consumer fraud journeys, including whether individuals are targeted, whether they lose money, and what follows in terms of reporting and recovery. More than one in three respondents reported experiencing fraud, and almost two-thirds of these individuals lost money as a result. A prediction exercise shows that the likelihood of experiencing fraud is strongly influenced by behavioural factors, while demographic characteristics such as age, education, or income also play a role. Fraud-specific literacy significantly reduces predicted fraud experience, whereas general financial literacy does not. Greater use of digital and financial products increases predicted fraud experience. Risky online behaviours—including shopping on unfamiliar websites, sharing payment details through insecure channels, and sending money to unknown individuals—emerge as the strongest behavioural predictor of fraud experience. These results highlight the rationale for current multi-faceted and cross-agency approaches, which seek to improve public awareness and education specific to fraud, while also strengthening digital and financial system safeguards. |
| Keywords: | Firm Heterogeneity, Firm Sensitivity, Aggregate Fluctuations, Machine Learning. |
| JEL: | D22 E32 C14 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:07/rt/26 |
| By: | Enrique Martínez García; Mark A. Wynne |
| Abstract: | During a presentation and discussion hosted by the Global Institute last month, Steve Kamin discussed how tariffs, volatility and evolving payment technologies are challenging—but not yet dislodging—the dollar’s position as a reserve currency at the center of the global financial system. |
| Keywords: | dollar; payment technology; international economics |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:102538 |
| By: | John Theal |
| Abstract: | This paper provides an empirical assessment of the impact of the European Union’s Instant Payments Regulation (IPR) on the use of instant credit transfers in Luxembourg. Using monthly payment service provider (PSP)-level data on customer credit transfers sent between 2022 and 2025, the analysis examines whether the IPR affected sending behaviour following its entry into force in January 2025 and ahead of the October 2025 mandatory sending deadline. The empirical strategy combines difference-in-differences and dynamic event-study models with complementary approaches, including an interrupted time series and a Generalized Synthetic Control Method. Payment institutions and electronic money institutionsare used as a control group. Between January and October, PSPs subject to the October IPR deadline show an immediate and statistically significant increase in the share of instant credit transfers sent, rising from roughly 0.8-1 percentage point in early 2025 to about 1.5-2 percentage points by late 2025. These effects correspond to several hundred thousand additional instant credit transfers per month due to the IPR, suggesting early operational adjustment and accelerated adoption of instant payments among PSPs in Luxembourg. |
| Keywords: | retail payments, instant payments, panel study, event study, difference in differences, generalized synthetic control |
| JEL: | C14 C44 E42 E58 G21 L86 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp208 |
| By: | Lisa D. Cook |
| Date: | 2026–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgsq:103180 |
| By: | Xudong An; Stuart A. Gabriel; Nitzan Tzur-Ilan |
| Abstract: | Using California's Camp Fire as a natural laboratory, this article examines the effects of both fire and smoke-related air pollution on household credit card spending and repayment. |
| Keywords: | Air Pollution; Credit Cards; household finances |
| Date: | 2024–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:98838 |
| By: | Rowe, Francisco (University of Liverpool) |
| Abstract: | Mobility datasets built from anonymised smartphone location traces, calldetail records and other digital exhaust underpinned much of the evidence-based response to COVID19 and now inform transport planning, retail activity and the delivery of urban service infrastructure. As of the 25th of July, the United Kingdom implemented the Online Safety Act (OSA) requiring online services to check users’ ages. Major platforms — from adult sites to social media networks, such as Bluesky, Discord, Grindr, Reddit and X — have committed to robust aggregating, and Ofcom is scrutinising their compliance. Many users across these platforms have responded by turning to virtual private networks (VPNs) or other location spoofing tools to preserve privacy. These evasive measures threaten to corrupt the very data that scientists and policymakers rely on to understand human movement. |
| Date: | 2026–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:fz7h9_v1 |
| By: | Mallett, Richard |
| Abstract: | this research note offers an introduction to and critique of contemporary vehicle financing in Uganda’s motorcycle-taxi (boda boda) industry. Informal workers in this sector have long accessed motorcycles through a daily rental-based system known as kibaluwa. however, over the past15 years a new wave of international asset financers have entered the fray, selling Ugandan moto-taxi riders the tantalising dream of ‘being your own boss’ through hire-purchase (or ‘ride-to-own’) credit schemes. Drawing on original interview- and survey-based data from the Ugandan capital, Kampala, this note drills through the glossy promotional material used to market these products to put forward a more grounded, worker-centred and critical perspective on what it means tobe and become a ‘financially included’ informal worker. It shows that despite delivering lucrative, if temporary, outcomes for riders once they have successfully completed hire-purchase, for the long duration of there payment schedule riders are exposed to new risks, new costs and new pressures. a clear conclusion is reached: for Uganda’s financially included moto-taxis, the powerful allure and rewarding experience of being one’s own boss is very different to the arduous process of becoming one. |
| Keywords: | financial inclusion; fintech; informal economy; motorcycle-taxis; boda boda; Uganda |
| JEL: | R14 J01 F3 G3 J1 |
| Date: | 2026–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137831 |
| By: | Dimitri B. Papadimitriou |
| Abstract: | There seems to be a building consensus of global uncertainty and instability. This can be observed not only from surveys, the media, and country reports, but in the recent speeches by members of the Federal Reserve Board of Governors. The Fed speeches focus on financial stability, not the usual price stability, but that of the financial system. Not surprising, given the unstable conditions of the US economy emanating from the geopolitical conflicts in the Middle East and elsewhere, is the excessive volatility and overvaluation of the equity markets and the public sector's erratic fiscal and trade policy stance. Reports show that equity funds loaded with AI investments--what we may call "emotional investments"--are now looking to unload them in the financial market, adding more fuel to market volatility that may cause a financial crisis, reminiscent of previous crises. The solution may lie in the implementation of a totally new economic regime in answer to recurring macroeconomic fragility. This paper considers the current conditions of macroeconomic fragility. It explores the challenges and risks to financial system stability that emerge from innovation-developed and increasingly decentralized finance--including the effects of cryptoassets, tokenization of digital assets, and artificial intelligence. |
| Keywords: | Minsky’s instability; decentralized finance; behavioral finance; financial system stability; cryptocurrencies; Artificial Intelligence |
| JEL: | E42 E58 G41 G23 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1114 |
| By: | Rosie Levy |
| Abstract: | Efficient allocation of bank reserves improves central bank balance sheet efficiency. Frictions in such redistribution can affect monetary policy implementation. |
| Keywords: | liquidity; payments; payment systems |
| Date: | 2025–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:101900 |
| By: | Hugo De Vere; Matthew McCormick |
| Abstract: | Understanding the underlying network structure of money markets provides valuable insights for monitoring reserve scarcity and its evolution in response to regulatory and market changes. |
| Keywords: | banks; liquidity; money markets |
| Date: | 2025–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:101902 |
| By: | International Monetary Fund |
| Abstract: | This is an abstract. |
| Date: | 2026–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2026/999 |
| By: | Amy Chapel; Emma Weiss |
| Abstract: | A research workshop hosted by the Federal Reserve banks of Boston, Chicago and Dallas focused on trade-offs between increased efficiency and specialized expertise and the potential introduction of vulnerabilities that companies face when dealing with third-party service providers. |
| Keywords: | economy; Financial system; risk management |
| Date: | 2026–02–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:102582 |
| By: | Power, Michael |
| Abstract: | In this Perspective essay, I offer some provocations about the future of auditing. I suggest that auditing is currently undergoing technological change in its practice unlike any other in its history in which notions of evidence and auditability have become fluid. The pervasiveness of algorithms in auditee systems necessitates that auditing itself becomes algorithmic in nature. Although there may be considerable efficiency benefits from this, there is a risk that auditing becomes ‘platformized’ as one app attached to auditee systems. This in turn implicates the non‐independence of the evidentiary basis of the audit. At the extreme, auditing becomes algorithmically self‐referential, and the human auditor is reduced to the ‘de‐skilled’ curator of analytical models and their decisions. At the same time, the underlying algorithms remain beyond auditability and human comprehension. I suggest that scholars have an opportunity to explore these processes empirically and that practitioners and professional institutes need to be vigilant about the side effects of technology in auditing. They must nurture the human‐centric and dialogic nature of the practice in the face of these changes. |
| Keywords: | auditability; audit evidence; transparency; datafication; algorithm; artificial intelligence |
| JEL: | M40 |
| Date: | 2026–04–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138062 |
| By: | Nicola Cortinovis; ; |
| Abstract: | Crowdfunding (CF) has emerged as a novel source of entrepreneurial finance, yet its role in shaping regional industrial dynamics remains poorly understood. Adopting an evolutionary economic geography perspective and exploiting a newly developed database, this paper examines the relationship between crowdfunding activity and the emergence of new local industrial specializations. The analysis shows that industries receiving funds through CF are more likely to become part of local specialization patterns, especially when they are related to the existing industrial structure. Moreover, these associations are stronger in counties characterized by higher levels of credit insecurity. |
| Keywords: | Crowdfunding, industrial diversification, relatedness, credit insecurity, US |
| JEL: | O14 O31 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2607 |
| By: | Abidi, Nordine; Gambacorta, Leonardo; Kok, Christoffer; Miquel-Flores, Ixart; Madio, Leonardo; Partida, Alberto |
| Abstract: | Investment in cybersecurity in an interconnected banking system has public-good proper- ties: positive externalities can generate systemic underinvestment. Using confidential supervi- sory data from the European Central Bank, we first identify “laggard” European banks that underinvest relative to their cyber-risk profiles, and then examine how supervisory scrutiny af- fects their incentives to invest. We exploit the 2024 ECB Cyber Resilience Stress Test (CyRST) as a quasi-natural experiment. In a difference-in-differences design, we find that following the CyRST announcement, laggard banks increased cybersecurity investment by about 80% rel- ative to their peers. The response is stronger among laggards subject to high-intensity su- pervisory oversight, consistent with scrutiny exerting a disciplining effect. Overall, the results suggest that targeted supervisory scrutiny may help mitigate underinvestment incentives and strengthen banks’ operational risk management. JEL Classification: G21, G28, G32, L86, K23 |
| Keywords: | bank supervision, cyber risk, IT investment, stress test |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263222 |
| By: | Kyriakos Christodoulides |
| Abstract: | Public procurement is vulnerable to error, fraud and corruption, yet high transaction volumes overwhelm oversight. While research often focuses on tender-stage anomalies, post-award payments remain underexplored. Since labelled datasets are rare and existing methods such as Benford's Law face restrictive assumptions, there is a need for additional interpretable, unsupervised frameworks that augment oversight and simplify management. This paper introduces the Structural Heterogeneity Index (SHI), a composite statistic for one-dimensional samples defined by four components: modality, asymmetry, tail behaviour, and structural dispersion. The Payment Heterogeneity Index (PHI) is its multiplicative instance for post-award payments. PHI combines a tail-behaviour component, sensitive to outliers and point clustering, with a structural-dispersion component summarising payment regime architecture. Structural dispersion is computed via Gaussian Mixture Model (GMM) estimation, integrating within-regime variability, prevalence, and separation from the dominant mode. Applied to UK municipal procurement data, PHI isolates a financially significant cohort (10.1% of high-volume suppliers) whose structural signatures deviate from the population and interact with recurring payment anchors. Permutation and Kolmogorov-Smirnov tests confirm that high-PHI suppliers exhibit statistically significant structural differences. A forensic review by a Certified Fraud Examiner supports the plausibility of the prioritised cases. Comparison shows PHI uniquely identifies regime separation obscured by metrics like the Coefficient of Variation (\r{ho}=0.310). PHI functions as an effective discovery tool where no confirmed labels exist, offering a transparent, lightweight screening mechanism for post-award oversight. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.12547 |