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on Payment Systems and Financial Technology |
| By: | Milne, Alistair; Niepelt, Dirk; Skeie, David |
| Abstract: | We assess retail central bank digital currency (CBDC) against the objective of the uniformity of money. The central questions that arise are whether CBDC could help support the uniformity of money across public and private monies in day-to-day payments; how it interacts with the unit of account and monetary sovereignty; and how its design choices impact its contribution. |
| Keywords: | Uniformity; Money; Central Bank Digital Money CBDC |
| JEL: | E42 E51 E58 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21448 |
| By: | Friedrich, Christian; Zhao, Laura |
| Abstract: | In this paper, we examine the patterns and determinants of cross-border cryptocurrency flows. While our analysis focuses primarily on Bitcoin flows, the cryptocurrency with the largest market capitalization, we show that our key results also extend to four major stablecoins. After documenting global patterns of cross-border Bitcoin flows and contrasting them with those of traditional capital flows, we employ a cross-country panel approach to identify the key drivers of cross-border crypto flows for up to 162 countries. Our results provide evidence for the presence of multiple coexisting motives. The most significant motives comprise strategies to adjust to unfavorable macro and financial developments, as well as the need to conduct international payment and remittance transfers. Moreover, by conducting a case study of cross-border Bitcoin flows after the COVID-19 shock, we find that these motives were particularly relevant at a time when economic conditions were weak and the need for remittances appeared high. Gaining a better understanding of the motives behind cross-border cryptocurrency transactions is crucial for informing the public debate on cryptocurrencies and their potential use cases. |
| Keywords: | Bitcoin |
| JEL: | E4 F3 F32 F38 F51 G15 G23 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21528 |
| By: | Samuel Fahim |
| Abstract: | This paper studies whether fast-settlement payment layers can replace secure baselayer blockchains in a search-theoretic monetary model. The Chain provides secure but costly and probabilistic settlement, while the Network provides instant, cost-free payments but exposes users to cyberattacks and requires sellers to incur adoption costs. In the Chain-only benchmark, buyers choose settlement intensity after bargaining. Because they do not internalize the full trade surplus, settlement intensity is inefficiently low, reducing trade efficiency and weakening the monetary value of tokens. Introducing the Network generates multiple payment equilibria. Under exogenous cyberattack risk, Chain and Network payments may coexist: the Network provides fast settlement and fallback liquidity when Chain settlement fails, while the Chain remains valuable for its security and universal acceptance. If cyberattack risk is sufficiently low, pure Network payments can arise, although pure Chain payments may also persist because Network acceptance is costly for sellers. When cyberattack risk is endogenous, broader Network adoption increases exposed balances and strengthens hackers’ incentives. This security externality weakens the Network’s value as fallback liquidity and eliminates the pure Network-payment equilibrium. The Chain, therefore, survives as a secure settlement anchor. The welfare analysis shows that Network adoption is not always welfare improving: its payment-efficiency gains must outweigh seller adoption costs and, under endogenous attacks, the resource costs of hacking. Fast-settlement layers can improve payment efficiency, but they do not generically replace secure base-layer settlement. |
| Keywords: | Cryptocurrency payments; Blockchain settlement; Layer-2 payment networks; cyberattack risk; Payment-layer competition; New Monetarist literature; Search-theoretic monetary model. |
| JEL: | E42 E40 D83 C78 O33 D62 |
| Date: | 2026–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0101 |
| By: | Shubhangam Shukla; Mahesh Peyyala; Abhijit Chakraborty |
| Abstract: | We investigate the evolving structure of interactions in cryptocurrency markets using a network-based framework constructed from high-frequency price data spanning 2020-2025. Directed and weighted networks are constructed from statistically significant Granger causal relationships between cryptocurrency log-returns, enabling us to quantify the flow of influence across assets. We find that normalized returns exhibit heavy-tailed distributions, consistent with the presence of large intermittent fluctuations and in line with stylized facts of financial markets. The resulting networks display pronounced heterogeneity in link weights and nodal strengths, indicating that a small subset of cryptocurrencies contributes disproportionately to market dynamics. By ranking cryptocurrencies based on their nodal out-strength, we uncover a dynamically evolving hierarchy of influence. Ethereum consistently emerges as the most influential asset, while Bitcoin shows a gradual decline in its relative importance. The ranking structure exhibits substantial temporal variability, with multiple cryptocurrencies entering and exiting the top positions over time. Our findings reveal a highly competitive and non-stable organization of the cryptocurrency ecosystem. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.25466 |
| By: | Eichengreen, Barry |
| Abstract: | Although the U.S. dollar remains the dominant currency used in cross-border transactions, policymakers worldwide are increasingly uncomfortable with their financial dependence on the greenback. Their worries are heightened by developments such U.S. efforts to promote the issuance and use of dollar-linked stablecoins, which aspire to cement dollar dominance. This paper asks how countries, and Asian countries in particular, should respond to the challenge. It recommends a diversified strategy whereby governments and central banks explore the development of stablecoins linked to other currencies, link their fast-payment systems, pilot interoperable central bank digital currencies, and explore digital correspondent banking through tokenized bank deposits. |
| Keywords: | Dollar; Stablecoins; Asia |
| JEL: | F0 F30 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21372 |
| By: | Allan Pedersen |
| Abstract: | Europe's 2026 review of MiCA is usually framed as one choice for the euro stablecoin. The real question is the mix. A trilemma (par stability, private credit, no public backstop) lets a single token hold only two of the three; the corner that reaches for all three is structurally unstable, for reasons of coordination that no calibration fixes. But at the level of the system the three coherent designs are not rivals: they are lanes that can run in parallel, narrow money (a privately issued claim on the central bank), bank money (bank-issued tokens and tokenised deposits), and a public anchor (a digital euro and on-chain central-bank money). This note weighs each against six EU objectives, shows that the best mix turns on which objectives are prioritised, and offers a conditional sequenced portfolio, with one unconditional conclusion: close the incoherent non-bank corner. |
| Keywords: | stablecoins; e-money tokens; MiCA; narrow banking; central bank digital currency; tokenised deposits; monetary sovereignty; disintermediation |
| JEL: | E42 E58 G21 G28 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:pmt:wpaper:3 |
| By: | Allan Pedersen |
| Abstract: | Are stablecoins a new kind of money, or a new kind of bank? Europe's Markets in Crypto-Assets Regulation (MiCA) has never quite decided. It treats a fiat-backed stablecoin (an e-money token) as a digital wrapper around existing money, yet loads the issuer with much of a bank's prudential machinery. The result is coherent in one case and unstable in another, depending on who issues it. A bank-issued token sits inside the public safety net, and the arrangement holds. A non-bank issuer faces the same bank-grade rules but no safety net: an instrument that promises to be worth one euro, invests in assets that can lose value, and has nothing to fall back on in a panic. Those three features cannot all hold at once. Reading the 2026 review consultation as a live document, the note finds three EU institutions pulling this corner three ways, and argues the review should choose one coherent design, not fine-tune an incoherent middle. |
| Keywords: | stablecoins; e-money tokens; MiCA; regulatory perimeter; private money; lender of last resort; monetary sovereignty; digital euro |
| JEL: | E42 E58 G21 G28 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:pmt:wpaper:2 |
| By: | Juan Carlos Angulo (Department of Economics, Universidad Iberoamericana Ciudad de Mexico); Monia Gruber (Facultad de Ciencias Economicas y Empresariales, Universidad Autonoma de Madrid, Spain) |
| Abstract: | This study examines the relationship between criminality and financial inclusion across 128 countries using data from the Global Findex Database and the Global Organized Crime Index. We assess whether the presence of criminal actors and criminal markets influences individuals' likelihood of owning a financial account. The results indicate that higher levels of criminality are associated with a lower probability of account ownership. This relationship is driven primarily by the presence of criminal actors, particularly state-embedded actors and mafia-style groups, rather than criminal markets. Regional analyses reveal substantial heterogeneity, with the strongest negative effects observed in East Asia and the Pacific, Latin America, and the Middle East and North Africa. The findings contribute to the literature on criminality, financial inclusion, and digital finance by highlighting how criminal governance structures may undermine access to formal financial services. |
| JEL: | G21 G40 O30 |
| Date: | 2026–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:smx:wpaper:2026008 |
| By: | Batiz-Lazo, Bernardo |
| Abstract: | Abstract This paper explores the evolution of the payment system in Mexico, highlighting the role of the Bank of Mexico in its modernisation. It is clear that the way in which we make our purchases has changed significantly since the creation of the Royal Mint in 1535 up to the introduction of CoDi in 2019. The Bank of Mexico, founded in 1925, has been a cornerstone of this transformation, implementing advanced technologies such as magnetic ink character recognition (MICR) in 1984 and the Interbank Electronic Payments System (SPEI) in 2004. This paper analyses how these innovations have improved the efficiency, security and accessibility of the payment system, benefiting the Mexican population and strengthening the national economy. Resumen Este artículo explora la evolución del sistema de pagos en México, destacando el papel del Banco de México en su modernización. Es patente que la forma en que realizamos nuestras compras se ha transformado desde la creación de la Casa de Moneda en 1535 hasta la introducción de CoDi en 2019. El Banco de México, fundado en 1925, ha sido un pilar en esta transformación, implementando tecnologías avanzadas como el reconocimiento de caracteres por tinta magnética (MICR) en 1984 y el Sistema de Pagos Electrónicos Interbancarios (SPEI) en 2004. Este trabajo analiza cómo estas innovaciones han mejorado la eficiencia, seguridad y accesibilidad del sistema de pagos, beneficiando a la población mexicana y fortaleciendo la economía nacional. |
| Keywords: | financial technology, payment system, central bank, Mexico tecnología financiera, fintech, sistema de pagos, banco central, México. |
| JEL: | G2 M1 M2 N1 N2 N8 O33 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129757 |
| By: | Naneh Hovanessian (Central Bank of Armenia); Elen Khanikiryan (Central Bank of Armenia); Gevorg Minasyan (Central Bank of Armenia); Hovhannes Khachatryan (Central Bank of Armenia) |
| Abstract: | This paper evaluates the impact of a large-scale government cashback program on non-cash payment adoption among pensioners in Armenia, a population traditionally reliant on cash. Using comprehensive administrative data covering all bank accounts of pension beneficiaries, we exploit the staggered rollout of the program across banks to identify causal effects on payment behavior. We document three main findings. First, financial incentives generate a substantial increase in noncash transactions, with effects reaching approximately 21 percentage points for transaction value and 24 percentage points for transaction counts after 18 months. Second, we find no evidence of broad-based digital payment adoption: the increase in non-cash payments is concentrated on the incentivized pension card and is partly offset by reduced use of other cards, suggesting substitution across payment instruments rather than a general increase in digital payment activity. Third, leveraging the removal of cashback eligibility for utility payments, we show that the effects are only partially persistent. Utility payments through pension cards decline sharply once incentives are withdrawn, with limited reallocation to other cards, indicating that a significant share of the observed behavior reflects strategic responses rather than durable habit formation. Overall, the results suggest that while financial incentives are effective in inducing short-run behavioral change, their ability to generate lasting shifts remains limited. |
| Keywords: | Cashback Program; Pensioners; Payment Behavior; Habit Formation; Substitution Effect |
| JEL: | D12 D91 E42 G20 C23 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:ara:wpaper:wp-2026-02 |
| By: | Dominika Langenmayr; Rohit Reddy Muddasani |
| Abstract: | Firms in the digital economy often pay little tax in the countries where their customers are based. In response, market countries have introduced digital service taxes on the revenue of these firms to indirectly tax their profits. We study the incidence of these taxes using data on Amazon, the largest online retailer. We find that in most countries, Amazon increased its fees by roughly the amount of the digital service tax. Firms using Amazon as a platform have largely passed these increased fees on to consumers. Large digital firms thus bear only a small part of the tax burden, but the tax may nevertheless succeed in making them less competitive relative to brick-and-mortar retailers. |
| Keywords: | tax incidence, digital service taxes, two-sided markets, platforms |
| JEL: | H22 D40 L50 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12713 |
| By: | Kai Wang (Charles University, Faculty of Social Sciences, Institute of Economic Studies, Czechia); Ladislav Kristoufek (Charles University, Faculty of Social Sciences, Institute of Economic Studies, Czechia & Department of Applied Mathematics, Faculty of Information Technology, Czech Technical University in Prague, Czech Republic) |
| Abstract: | Platform-level gas fees serve as a public, real-time, predictive signal of cross-sectional liquidity risk in blockchain ecosystem tokens. Using a daily panel of 4, 224 chain-specific tokens on Ethereum, BNB Chain, and Solana between 2017 and 2025 (2.04 million tokenday observations), gas fees are positively and significantly associated with token-level log Amihud illiquidity on every ecosystem after broad market illiquidity controls and two-way clustering on token and date. The magnitudes differ across chains in ways that line up with their fee-market designs and are economically substantial. A price-based native-token illiquidity factor also co-moves with chain-specific tokens, but the direct congestion measure is more robust to sample composition shifts and absorbs the price-based proxy on BNB Chain. Co-movement through returns and volatility is weak, consistent with the result running through trading frictions rather than expected returns or return variance. The institutional feature behind this result has no analogue in traditional markets, namely that execution costs in every chain-specific token are set in a single, system-level fee market for block space, paid in the chain’s native asset. Because gas fees are public, machine-readable, and available in real time, they offer a leading indicator for monitoring blockchain-market fragility. |
| Keywords: | Gas fees, Block space, Illiquidity, Blockchain congestion, Native tokens, Crypto microstructure |
| JEL: | G12 G14 G23 D44 C23 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_16 |
| By: | Gabriele Camera (ESI, Chapman University); Gary Charness (UC Santa Barbara); Nir Chemeya (Ben-Gurion University of the Negev) |
| Abstract: | The future architecture of financial systems is a subject of contention, with centralized and decentralized governance proponents. Here we ask: would the architecture affect the quality of decision-making? We propose a game where financial network participants demarcate the ownership of claims to income. This governance task can be decentralized (shared authority), centralized (single authority), or hybrid (alternating authority). Without communication all architectures supported poor outcomes. With communication, decentralization ensured good governance and maximum profits, while centralization did not—lowering communication’s potency in promoting socially optimal decisions. This indicates there is scope for decentralization in innovating financial institutions. |
| Keywords: | decentralized finance, distributed networks, money, fintech, group decisionmaking, digital payments, currency design, validation, trusted parties |
| JEL: | D81 G3 G4 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:26-06 |
| By: | Chemla, Gilles; Tinn, Katrin |
| Abstract: | We study conditions under which tokenization creates value for indivisible real-world assets (RWAs). We show that tokenization does not create value merely by making an asset transferable, fractional, or digitally scarce. Value arises only when digital ownership records change the economics of ownership by leveraging on asset characteristics and past ownership records on the blockchain. This may generate retained value for past owners, create provenance value for later buyers, separate usage and financial rights, support membership benefits through fractional ownership, or strengthen post-sale incentives through royalties. These forces determine whether tokenized markets are inactive, thin but informative, lemons-like, or liquid but uninformative. We discuss implications for art and luxury tokens, private-equity and venture-capital tokens, real-estate tokens, tokenized claims on a social enterprise, and sustainable-firm tokens. |
| JEL: | D82 D86 G23 G32 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21512 |
| By: | Kenechukwu E. Anadu; Patrick E. McCabe; JP Perez-Sangimino; Nathan Swem |
| Abstract: | New money-like products, such as tokenized money market funds (MMFs), money market exchange-traded funds (MMETFs), and stablecoins, could be transformative for finance. These products may offer significant benefits, but like other money-like assets, they also have certain vulnerabilities. We introduce a framework to analyze the vulnerabilities of new products by comparing their features to those that contribute to vulnerabilities in MMFs. Specifically, we examine the extent to which each product engages in liquidity transformation, is subject to threshold effects, serves as a money-like asset, poses contagion risks, and has reactive investors. Our framework is useful for assessing the potential effects of novel cash-like products on the overall resilience of the financial system and how such an assessment may change as these products’ uses evolve. |
| Keywords: | money market funds; stablecoins; tokenized money; financial stability; liquidity transformation |
| JEL: | E5 G23 G1 |
| Date: | 2026–06–22 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbqu:103460 |
| By: | Sandra Bilek-Steindl; Susanne Bärenthaler-Sieber (WIFO); Julia Bock-Schappelwein; Michael Peneder |
| Abstract: | In light of the widespread use of digital platforms, this paper addresses the question of whether and how firms derive benefit from their use and aims to estimate the contributing factors. Using data from a newly implemented enterprise survey in Austria, we evaluate both individual survey results and a combined measure of the effects on revenues, costs and selling prices. Logistic regressions reveal significant differences in the impact of digital platforms on firms depending on the firm characteristics and the business domains, like for sales, in which the platforms are used. Their application also has effects for the business partners of the firms. Empirical results find a predominantly positive impact of platform use on the firms' customers, consisting of firms (B2B) and consumers (B2C), with respect to quality and product variety. |
| Keywords: | Digital platforms, Enterprise survey, Technological impact, Network effects |
| Date: | 2026–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:728 |
| By: | Vincent Brennan |
| Abstract: | Master accounts have long been the gateway for depository institutions to access Fed financial services, such as electronically transferring funds and distributing cash. |
| Keywords: | Federal Reserve Financial Services; Federal Reserve master accounts |
| Date: | 2026–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00100:103425 |
| By: | Dominika Langenmayr; David Streich |
| Abstract: | We provide evidence that individuals use cryptocurrencies to channel funds into and out of tax havens. Exploiting the Panama Papers (2016) and Paradise Papers (2017) leaks as shocks to offshore detection risk, we compare prices of cryptocurrency–fiat pairs involving Singapore and Hong Kong dollars — the two haven currencies with sufficient trading data — to those involving non-haven currencies on the same exchanges. Prices denominated in haven currencies rise by approximately 10% relative to non-haven currencies following the leaks, consistent with increased demand for crypto originating in tax havens. Effects are concentrated on smaller, less liquid exchanges where arbitrage is constrained, and dissipate within two months, consistent with market efficiency and limits-to-arbitrage theory. These findings suggest cryptocurrencies serve as an alternative channel for capital flows that bypass conventional anti-money-laundering infrastructure. |
| Keywords: | tax havens, illicit financial flows, cryptocurrencies |
| JEL: | H26 G12 G14 F31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12740 |
| By: | Stöckli, Sabrina; Shen, Henry; Bartsch, Fabian |
| Abstract: | We introduce Susceptibility to Online Social Influence (SOSI) as a disposition reflecting users’ tendencies to seek information from others to reduce uncertainty and to conform to the expectations of others on social media to gain approval, enhance self-image, or avoid social disapproval. Across nine studies with 3, 075 participants from the US, China, Mexico, and the UK, we developed a robust, reliable scale to measure SOSI. Our research reveals that self-esteem is an antecedent to SOSI, while excessive social media use is a consequence. Furthermore, we identified social media user profiles based on SOSI’s dimensions. The informative dimension of SOSI also shapes how users respond to posts from different sources (e.g., known vs. unknown). Overall, the SOSI scale provides both a conceptual framework and a practical tool for examining how social influence shapes social media use. By offering a more accurate method for identifying user dispositions than traditional offline scales, SOSI scale enhances insights into behaviors unique to social media. |
| Keywords: | informative influence; measurement; normative influence; online social influence; scale development; social media |
| JEL: | J50 |
| Date: | 2026–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138959 |
| By: | Altavilla, Carlo; Boucinha, Miguel; Burlon, Lorenzo; Adalid, Ramon; Fortes, Roberta; Maruhn, Franziska |
| Abstract: | This paper studies the effects of stablecoin adoption — crypto-assets designed to maintain a stable value relative to a reference asset — on bank intermediation and the transmission of monetary policy. Using evidence from the rapid expansion of stablecoins combined with confidential granular data on euro area banks and their individual borrowers, we document three main findings. First, stablecoin adoption induces a deposit-substitution mechanism, whereby funds shift from retail bank deposits to digital assets. This reallocation increases banks’ reliance on wholesale funding and can ultimately constrain their intermediation capacity. Second, we show that stablecoins affect the pass-through of policy rates to bank funding costs and lending conditions, potentially strengthening bank-based monetary policy transmission while making it less predictable. These effects are nonlinear and depend critically on the scale of stablecoin adoption, their design features, use cases, and regulatory treatment. Third, we document a potential risk associated with the growing prevalence of foreign-currency-denominated stablecoins. Their diffusion is likely to increase banks’ reliance on foreign-currency wholesale funding. We show that banks with greater exposure to this source of funding exhibit a weaker loan-supply response to domestic monetary policy shocks, indicating a weakening of monetary policy transmission and a potential erosion of monetary sovereignty. |
| Keywords: | Stablecoins |
| JEL: | E52 E44 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21321 |
| By: | Parma Bains; Gabriela E Conde; Nobuyasu Sugimoto; Caroline Wu |
| Abstract: | Large technology firms (BigTech) are increasingly expanding into consumer-facing financial services, particularly payments, credit, insurance, asset management, and financial SuperApps. While their current financial stability implications remain limited in most jurisdictions, rapid growth, especially in emerging market and developing economies, raises new conduct, prudential, and systemic risks. This paper analyzes BigTech business models, key activities, and associated risks, and assesses the adequacy of existing regulatory frameworks. It discusses practical options for supervisors to enhance risk identification, strengthen sector-based and group-wide supervision, expand the regulatory perimeter, improve data protection frameworks, and reinforce domestic and international coordination. No global financial standards apply specifically to BigTech. Given the cross-border nature of BigTech activities, global standards should be developed to facilitate internationally consistent regulation and effective cross-border cooperation. |
| Keywords: | BigTech; BNPL; conglomerate; emerging market and developing economies; financial stability; fintech; systemic risk; insurance; credit; payments; asset management; regulation; supervision |
| Date: | 2026–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2026/009 |
| By: | Claessens, Stijn; Rice, Tara |
| Abstract: | Cross-border payments (XBP), particularly remittances and retail transactions, remain more costly, slower, less accessible, and less transparent than domestic payments. The continued inefficient XBP arrangements, in contrast to progress made in domestic payments using new technologies and innovative models, reflect that private actors alone cannot overcome the many market failures that hinder XBP. The most binding constraint concerns the limited interoperability which relates to the multi-sided market frictions in XBP and the institutional differences between countries. These, ultimately, only proactive and collaborative public sector efforts can overcome. Key priorities are therefore greater harmonization of standards, especially for message transmission, more effective compliance regimes, and promotion of competition. |
| JEL: | E41 E42 E51 E52 E58 G21 G28 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21280 |
| By: | Callen, Michael; Fajardo-Steinhäuser, Miguel; Findley, Michael; Ghani, Tarek |
| Abstract: | Can digital payments help reduce extreme hunger? Humanitarian needs are at their highest since 1945, aid budgets are falling behind, and hunger is concentrating in fragile states where repression and aid diversion present major obstacles. In such contexts, partnering directly with governments is often neither feasible nor desirable, making private digital payment platforms a potentially useful means of delivering assistance. We experimentally evaluated digital payments to extremely poor, female-headed households in Afghanistan, as part of a partnership between community, nonprofit, and private organizations. The payments led to substantial improvements in food security and mental well-being. Despite beneficiaries' limited tech literacy, 99.75\% used the payments, and stringent checks revealed no evidence of diversion. Before seeing our results, policymakers and experts are uncertain and skeptical about digital aid, consistent with the lack of prior evidence on digital payments for humanitarian response. Delivery costs are under 7 cents per dollar, which is 10 cents per dollar less than the World Food Programme's global figure for cash-based transfers. These savings can help reduce hunger without additional resources, demonstrating how hybrid partnerships utilizing digital payment platforms can help address grand challenges in difficult contexts. |
| JEL: | C93 O12 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21531 |
| By: | Sadanand Singh; Allam Reddy; Manan Chopra |
| Abstract: | We present a convolutional variational autoencoder for cryptocurrency implied-volatility surfaces, together with a deployable predictor that combines it with a quadratic smile re-fit through a deterministic per-tenor routing rule. Trained on 6, 034 fully-filled hourly Binance Options surfaces of BTC and ETH spanning May-October 2023 and parameterised on a common $6 \times 7$ tenor-delta grid, the model attains a hidden-cell surface-completion RMSE in the 0.94-1.56 vol-point range across both markets and mask rates 10-50%. The hybrid predictor attains 0.83 vol points at 50% masking against 7.00 for the smile re-fit alone, an eightfold reduction obtained at no additional inference cost. Under structurally-correlated hole patterns that emulate the withdrawal of an entire tenor of strikes, the smile re-fit incurs 9.6-13.1 vol points of error while the learned model remains at 1.5-1.9, isolating a regime in which the generative model is the only viable predictor. Joint training on BTC and ETH improves the in-distribution model on both markets by 9-27% relative to the better-performing single-symbol counterpart, indicating a substantially shared vol-surface manifold across the two largest cryptocurrencies over the observation window. The hybrid is calendar- and butterfly-arbitrage-free at the listed strikes, a property that the parametric smile re-fit alone fails at high mask rates. The per-snapshot reconstruction error of the trained model flags the late-October ETF-anticipation rally and the August $17$, $2023$ flash crash as elevated-error periods without supervision. All training and evaluation infrastructure is released to support reproducible follow-on work. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.16961 |
| By: | Lisa Chung |
| Abstract: | Remarks at the Fifth Conference on the International Roles of the U.S. Dollar, Board of Governors of the Federal Reserve System, Washington, D.C. |
| Keywords: | market structure; Dollar role; monetary policy; financial market infrastructures; digital assets; US dollar |
| Date: | 2026–06–22 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsp:103427 |
| By: | Alan Matys; Federico Martín Rodriguez; Emiliano Delfau |
| Abstract: | We extend the 2025 conference study on Hierarchical Risk Parity (HRP) by addressing its two stated methodological follow-ups (Marchenko-Pastur denoising and spectral detoning) and by evaluating abroader cross-section of portfolio construction choices on a survivorship-bias-corrected, point-in-time Binance universe (146 ever-included symbols, 2020–2026). The comparison includes 27 constructed strategies spanning HRP-family variants, risk-based allocators, nested-clustering optimisers, momentum rules, and signal-aware extensions. Across 76 monthly rebalances, the HRP-family variants remain tightly clustered in risk-adjusted performance (annualized Sharpe 0.69 - 0.75), and this result persists under a 547- cell hyperparameter sweep (combined Hansen Superior Predictive Ability (SPA) pconsistent = 0.91). Strategies that alter the allocation step produce larger dispersion (notably the Minimum Variance Portfolio (MVP) , the Correlation-Regularised Iterative Shrinkage Portfolio (CRISP), the Nested Clustered Optimization with CRISP allocation (NCO–CRISP), and Nested Clustered Optimization (NCO)), with CRISP and NCO–CRISP significant in pairwise Ledoit–Wolf tests versus base line HRP in both full and post-COVID windows. However, after accounting for multiple comparisons, the headline SPA does not reject (pconsistent = 0.51), and the Deflated Sharpe Ratio (DSR) is directionally consistent with that conclusion. Post-COVID results indicate strong regime sensitivity: diversified HRPvariants lose 51–64% of capital while Bitcoin (BTC) and BTC-concentrating allocators hold up better. We also revise a nearlier interpretation on cluster stability: over the full panel, Pearson-based clustering is more stable than lower- tail dependence at monthly frequency. Overall, the evidence supports a cautious interpretation: within this universe, horizon, and search space, allocation choices are more strongly associated with performance differences than clustering perturbations, but those edges remain statistically fragile under search-adjusted inference. |
| Keywords: | Hierarchical Risk Parity, cryptocurrency, denoising, detoning, tail dependence, Ledoit–Wolf, Hansen SPA, survivorship bias |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cem:doctra:928 |
| By: | Jona Whipple |
| Abstract: | The history of the creation of U.S. central banks includes political battles, financial crises, 77 years without a central bank—and one founding father’s enduring vision. |
| Keywords: | central banking; economic history; financial history; financial panics; financial crises |
| Date: | 2026–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00100:103481 |
| By: | Chenard, Antonin; Eichengreen, Barry; Monnet, Eric; Morvillier, Florian |
| Abstract: | We analyze an aspect of the international monetary system that has been the subject of little research: the distinction between foreign exchange reserves held as deposits and held as securities. We assemble new data for 109 countries in the period 1950-2022 based on previously unutilized statistics from central bank annual reports. We show that there has been movement since the late 1990s toward holding a larger share of reserves in the form of securities. Securities now account for almost two-thirds of total foreign exchange reserves, up from one-third a quarter century ago. This shift is concentrated in the decade between the emerging market crises of the late 1990s and the 2008 global financial crisis. It is associated with the accumulation of excess reserves, what central bank reserve managers refer to as the †investment tranche†of their reserve portfolios. |
| Keywords: | International monetary system; Foreign exchange reserves |
| JEL: | F30 F31 F33 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21488 |