We explore the economics and optimal design of "permissioned" distributed ledger technology (DLT) in a credit economy. Designated validators verify transactions and update the ledger at a cost that is derived from a supermajority voting rule, thus giving rise to a public good provision game....

The U.S. payments industry is in the process of developing ubiquitous, safe, faster electronic solutions for making a broad variety of business and personal payments. How this market for faster payments will evolve will be shaped by a range of economic forces, such as economies of scale and...

This article investigates how turnover has changed in the Hungarian payment system over the almost 18-month period since the introduction of intraday clearing (2 July 2012). A development exercise of a similar scale took place in Hungarian payments when VIBER was introduced in 1999, which...

Network analysis has been applied to identify systemically important financial institutions after the 2008 financial crisis. Such applications have stressed the importance of centrality within the too-connected-to-fail concept. Yet, despite their well-known importance for financial stability,...

We provide empirical evidence supporting the economic reasoning behind the impossibility of diversifcation benefts and the hedge attributes of cryptocurrencies remaining in force during the downside trends observed in bearish fnancial markets. We employ a spillover connectedness model driven by...

The design of Bitcoin is closely related to gold which has led to the idea that Bitcoin has gold-like features such as being a store of value and a safe haven. However, given Bitcoin's extreme volatility investors may rather need a safe haven against Bitcoin. We hypothesize that stablecoins...

This paper examines the financial stability risks associated with tokenized cash, a subset of stablecoins fully reserved with cash and cash equivalents. Using a combination of on-chain data together with uniquely collected wallet address labels, we construct empirical measures of liquidity...

This paper contributes to the debate on the design of a central bank digital currency (CBDC), focusing on the options for doing so using distributed ledger technology (DLT). We analyze the various structures for implementation offered by DLT - public, permissioned and private - and the...

We analyse the price discovery process in bitcoin-dollar trading on Coinbase, the most established cryptocurrency spot exchange. Using a modified reinforcement learning framework, we find that market orders individually carry more information than limit orders, but due to their abundance, limit...

Aim: In this paper, it is argued that in complex financial systems private goods, important for the creation of a market, have to be considered in a multiple of differing property rights structures necessary for the functioning of the system. This may lead to high transaction costs and adverse...