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While monetary autonomy is self-explanatory for cryptocurrencies such as Bitcoin with predetermined supply path, it is of great interest to probe into the monetary structures of Stablecoins. In these supply contracts and expands and capital restrictions apply due to the existence of reserves as the exchange rate arrangement adheres to a price rule.

Ever since the launch of Bitcoin and its offspring, examination of cryptocurrencies' trading activity from the empirical finance viewpoint has received much attention and continues to do so. The particular monetary arrangements found in Stable cryptocurrencies (colloquially referred to as Stablecoins), however, have not been properly (1) classified and (2) studied within an empirical international finance and banking context. This paper provides an empirical framework analogous to Impossible Trinity for exploring monetary arrangements across Stablecoins wherein reserves are held as price stability is targeted.

The study findings of existence of the degree of achievement along the three dimensions of the Impossible Trinity hypothesis, namely monetary independence, exchange rate stability and financial openness for a representative sample able to cover all varieties of Stablecoins, provide fresh empirical insights and arguments to this growing literature with respect to the success of their embedded exchange rate stabilization mechanisms. While the hypothesis can be supported for all cryptocurrencies in question, the trade-off combination among exchange rate stability, capital openness and monetary independence varies with the categorical types of Stablecoins.

If Stable cryptocurrencies, therefore, claim the role of global monetary assets freed from sovereign limits and national boundaries, it is critical to explore whether they adhere to traditional monetary frameworks. It goes without saying that in this work the author does not use a complete catalogue of all the available Stablecoins, rather a complete catalogue of all the possible asset classes of Stablecoins. While there is a significant difficulty in finding Algorithmic Stablecoins and, so far, there is plethora of Stable Token initiatives, a broader sample to further examine these under this paper's empirical framework is suggested. Enrichment of the robustness analysis by constructing additional proxies, possibly building time series for the proposed cmo1 subindex and using additional estimation methods is encouraged.

Stablecoins have been developed aiming to address the issue of excessive price variation in cryptocurrencies such as Bitcoin. Holders of Stablecoins enjoy the combined advantages of using a blockchain-based digital infrastructure in fulfilling the functions of store of value and media of exchange and of using a traditional currency, which merely plays the role of the unit of account (and in some circumstances the trusted reserve to which is convertible to). Understanding the varieties of Stablecoins and quantifying the components for success of their price stabilization may result in designing better Stablecoins.

Blockchain and cryptocurrencies have introduced new challenges to money and banking. Cryptocurrencies, which independently float such as Bitcoin, have gained the interest so far due to price variation that allows for gains. But these should be by far not considered to be a substitute to traditional means of payment. Lately, Stablecoins have increasingly gained attention for that USD Tether/Bitcoin pair (a Stablecoin pegged to the US dollar at parity) has outrun the US dollar/Bitcoin pair as the most traded pair in digital exchanges marking the strong position and high demand for Stablecoins.

This approach uncovers the varieties of Stablecoins with respect to their monetary constraints compared to the rest of the cryptocurrencies, which independently float. In this paper, the author provides a conceptual framework for the analysis of the exchange rate mechanisms conditional on Stablecoin asset classes accompanied with an empirical study from the monetary viewpoint. This is the first work in this attempt. The empirical framework employed is analogous to the traditional theory of international monetary economics referred to as Impossible Trinityz.

The peer review history for this article is available at: https://publons.com/publon/10.1108/JES-06-2020-0279

With the rise of cryptocurrency and its influence on the financial industry, this paper aims to explore cryptocurrency affordances that lead to approach–avoidance behavioral intentions for non-users (potential) and the intention to continue use for users (actual), drawing upon affordance theory and chasm theory.

The authors collected data from 480 potential and actual users in Germany and used maximum likelihood structural equation modeling (ML-SEM) to analyze it. In particular, the data consisted of 301 cryptocurrency users in Germany\ the authors used ML-SEM to test the post-adoption model. Additionally, logistic regression was utilized to determine the dominant actual usage method (store of value or medium of exchange) for various cryptocurrency coins.

According to the study's results, the perceived value benefits have a positive impact on the behavioral intention of potential users to adopt cryptocurrency, and they influence the intention of actual users to continue using it. However, both perceived volatility and financial risk tolerance are the most crucial factors hindering cryptocurrency adoption, whether in the pre-adoption or the post-adoption stage.

This is the first study to reveal cryptocurrency affordances and examine their effect on behavioral intentions toward cryptocurrency adoption based on the differences between non-users (potential) and users (actual). Furthermore, the authors explore how cryptocurrency holders perceive and invest in different coins (e.g. NFTs), which sheds light on factors such as financial risk tolerance that affect their decision making.

The paper explores the precarious balance between modernizing monetary systems by means of digital currencies (either issued by the central bank itself or independently) and safeguarding financial stability as also ensured by tangible payment (and saving) instruments like paper money.

Which aspects of modern payment systems could contribute to improve the way of functioning of today's globalized economy? And, which might even threaten the above-mentioned instable equilibrium? This survey paper aims, precisely, at giving some preliminary answers to a complex – therefore, ongoing – debate at scientific as well as banking and political levels.

The coexistence of State's money (i.e. “legal tender”) and cryptocurrencies can have a disciplining effect on central banks. Nevertheless, there are still high risks connected to the introduction of central bank digital currency, which should be by far not considered to be a perfect substitute of current cash. At the same time, cryptocurrencies issued by central banks might be exposed to the drawbacks of cryptocurrencies without benefiting from correspondingly strong advantages. A well-governed two-tier system to be achieved through innovation in payment infrastructures might be, in turn, more preferable. Regulated competition by new players combined with “traditional” deposits and central bank elements remains essential, although central banks should embrace the technologies underlying cryptocurrencies, because risk payment service providers could move to other currency areas considered to be more appealing for buyers and sellers.

We do not see specific limitations besides the fact that the following is for sure a broad field of scientific research to be covered, which is at the same time at the origin of ongoing developments and findings. Originality and implications of the paper are, instead, not only represented by its conclusions (which highlight the role of traditional payment instruments and stress why the concept of “money” still has to have specific features) but also by its approach of recent literature's review combined with equally strong logical-analytical insights.

In the light of these considerations, even the role of traditional payment systems like paper money is by far not outdated or cannot be – at this point, at least – replaced by central bank digital currencies (whose features based on dematerialization despite being issued and guaranteed by a public authority are very different).

No matter which form it might assume is what differentiates economic from barter transactions. This conclusion is by far not tautological or self-evident since the notion of money has historically been a great object of scientific discussion. In the light of increasingly modern payment instruments, there is no question that money and the effectiveness of related monetary policies have to be also explored from a social perspective according to different monetary scenarios, ranging from central bank digital currencies to private currencies and cash restrictions/abolition.

The originality/value of the following article is represented by the fact that it (1) refers to some of the most relevant and recent contributions to this research field, (2) moves from payment systems in general to their newest trends like cryptocurrencies, cash restrictions (or, even, abolition proposals) and monetary policy while (3) combining all elements to reach a common picture. The paper aims at being a comprehensive contribution dealing with "money" in its broadest but also newest sense.

The aim of this research is to explore multiscale hedging strategies among cryptocurrencies, commodities, and GCC stocks. Particularly, this is done by evaluating the connectedness among these asset classes covering a period with COVID-19 implications. Using the wavelet approach, the present study aims to recommend whether there exist different time horizon-based hedging abilities across the asset classes.

The approach used in this study is a multiscale decomposition of time series based on wavelets of daily prices of 13 asset classes. Since the wavelet analysis allows to decompose the time series into its frequency components at different time scales by a filtering process the study covered 1-day, 8-day, and 64-day time horizons to examine the hedging properties across those asset classes.

The results of this study show that hedging effectiveness differs among stock markets over time. In some cases, cryptocurrencies may keep their hedging properties across time while in others they switch from safe haven to hedge devices. In almost all cases, the three main cryptocurrencies showed diversifying properties as was observed by the multiscale correlation and hedge ratio estimations. In a competing sense, gold showed safe haven properties across time than cryptocurrencies except at an 8-day time scale where hedge ratios were low, positive and statistically different from zero that could be interpreted as a good hedge device in the medium term.

Though this research has considered a set of thirteen asset classes, it was limited to a period in which most cryptocurrencies started trading for the first time which reduces the number of observations compared to Bitcoin prices and stable coins such as Ethereum, Ripple, and Bitcoin Cash. Also, the research was focused on the GCC stock markets which may have different results as compared to other regional markets of Asia or Latin America. A comparative analysis in future could be another area of research in future.

This study has some significant policy implications. The cryptocurrency market is severely affected by demand and risk shocks to crude oil prices during the COVID-19 period. From the investor's point of view, diversification benefits can be obtained by combining cryptocurrencies along with oil-related products during episodes of financial turmoil and COVID-19 pandemic. The GCC region is constantly endeavoring to adopt more scientific tools and mechanisms of investment, and therefore, this study's results will provide some useful directions to the government, policymakers, financial institutions, and investors.

The current study covers a big bunch of 13 assets spanning across financial and real assets. This is based on literature gap and hence, will be a significant addition to the existing literature. Moreover, the GCC region is emerging as a global investment hub and this study will provide investors dynamic hedging strategies across these asset classes.

Fat‐tailed distributions have been found in many financial and economic variables ranging from forecasting returns on financial assets to modeling recovery distributions in bankruptcies. They have also been found in numerous insurance applications such as catastrophic insurance claims and in value‐at‐risk measures employed by risk managers. Financial applications include:

As decentralized finance (DeFi) has collected substantial promotion, investment and cryptographic development as a new model for numerous financial operations over the last months. As DeFi models and technology are quite unique, authorities have not been engaged much yet. However, these non-regulated financial markets will be overlooked for no long by the regulators. Therefore, the purpose of this paper is to analyse and evaluate the new challenges for financial crime compliance which need to be tackled very soon.

The research relied on secondary sources of data, using secondary research to collect archival data in the form of documents. Content and thematic analyses were used to synthesize the collected data

DeFi is considered to be one of the major steps towards adopting crypto masses. It is expected that DeFi will play a significant role in future and provide the present banking system with a feasible alternative. Therefore, it is crucial that the DeFi industry must address the main risks to ensure its “user” full compliance.

This research is the first to analyse the emerging challenges of fighting financial crime in the DeFi ecosystem.

Cryptoassets have recently attracted the attention of national and international financial regulators. Since the mid-2010s blockchains have increasingly been adapted to automate and replace many aspects of financial intermediation, and by 2015 Ethereum had created the smart contract language that underpins the digitization of real assets as asset-backed tokens (ABTs). Those were initially issued by FinTech companies, but more recently banks active on international capital and financial markets, and even central banks, for example, the Bank of Thailand, have developed their own digital platforms and blockchains. A wide variety of real and financial assets underpins ABTs, viz., real-estate, art, corporate and sovereign bonds, and equity. Consequently, owing to the significant market capitalization of cryptocurrencies, the Basel Committee on Banking Supervision (BCBS) published two consultative papers delineating its approach on cryptoasset regulation. In this study, the authors analyze the mechanics of ABTs and their potential risks, relying on case studies of recent issuance of tokens in equity, real-estate, and debt markets, to highlight their main characteristics. The authors also investigate the consequences of the increasingly oligopolistic structure of blockchain mining pools and Bitcoin exchanges for the integrity and security of unregulated distributed ledgers. Finally, the authors analyze the BCBS’ regulatory proposals, and discuss the reaction of international financial institutions and cryptocurrency interest groups. The main findings are, firstly, that most ABTs are akin to asset-backed securities. Secondly, nearly all ABTs are “off-chain/on-chain,” that is, the underlying is a traditional asset that exists off-chain and is subsequently digitized. The main exception is the World Bank’s bond-i that is genuinely native to the blockchain created by the Commonwealth Bank of Australia, and has no existence outside it. Thirdly, all ABTs are issued on permissioned blockchains, where anti-money laundering/anti-terrorist funding and know-your-customer regulations are enforced. From a prudential regulatory perspective, ABTs do not appear to pose serious systemic risks to international financial markets. This may account for the often negative reactions of banks, banking associations, and cryptocurrency interest groups to the BCBS’ 2021 proposals for risk-weighted capital provisions for cryptoassets, which are viewed as excessive. Finally, we found that issuance of ABTS and other smart contracts on permissionless blockchains such as Bitcoin and Ethereum could potentially generate financial instability. A precedent involving Ethereum and The DAO in 2016 shows that (i) there is a significant accountability gap in permissionless blockchains, and (ii) the core developers of blockchains and smart contract technology, and Bitcoin mining pools, exercise an unexpectedly high- and completely unregulated-amount of power in what is supposedly a decentralized network.