Stablecoins and Central Bank Digital Currencies: Policy and Regulatory Challenges

Asian Economic Papers ◽

10.1162/asep_a_00843 ◽

2022 ◽

pp. 1-18

Author(s):

Barry Eichengreen ◽

Ganesh Viswanath-Natraj

Keyword(s):

Central Bank ◽

Futures Market ◽

Use Case ◽

Time Varying ◽

Bottom Line ◽

Digital Currency ◽

Cross Border ◽

Using Data ◽

Regulatory Challenges

Abstract Stablecoins and central bank digital currencies are on the horizon in Asia, and in some cases have already arrived. This paper provides new analysis and a critique of the use case for both forms of digital currency. It provides time-varying estimates of devaluation risk for the leading stablecoin, Tether, using data from the futures market. It describes the formidable obstacles to widespread use of central bank digital currencies in cross-border transactions, the context in which their utility is arguably greatest. The bottom line is that significant uncertainties continue to dog the region's digital currency initiatives.

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Modern models of systems of central bank digital currency

St Petersburg University Journal of Economic Studies ◽

10.21638/spbu05.2021.202 ◽

2021 ◽

Vol 37 (2) ◽

pp. 205-240

Author(s):

Dmitry Kochergin ◽

Keyword(s):

Central Bank ◽

Central Banks ◽

Payment Systems ◽

Bank Of China ◽

Digital Currency ◽

Cross Border ◽

Economic Interpretation ◽

Key Characteristics ◽

National Implementation ◽

Retail Payments

The article examines modern models of digital currency systems of central banks (CBDC) for retail payments and wholesale settlements. The study gives economic interpretation and defines the key characteristics of central bank digital currencies, identifies the features of the main models of digital currencies systems and analyzes the most advanced national implementation projects of CBDC. The study concludes that the digital currencies of central banks are a new (digital) form of fiat money. The implementation of digital currencies of central banks is due to the need to improve the efficiency of the monetary and payment systems and is aimed at preserving of the central banks as a monetary issuer. The main advantages of digital currencies for retail payments are the offer of a highly liquid, low-risk and universally accessible means of payment. The key benefits of wholesale digital currencies are to provide faster, safer, and cheaper cross-border payments. Among the models of digital currencies systems for retail payments (R-CBDC) the model of hybrid system is characterized by the best reliability and speed when processing a large number of payment transactions. Therefore, these systems are the most promising for implementation. Between the models of systems for wholesale payments (W-CBDC) systems with a universal digital currency are the most suitable for eliminating the main problems of cross-border payments. However, the implementation of such systems may require a large number of technological, managerial and financial changes in the payment systems of central banks. Currently, the most advanced project for issuing R-CBDC is the DCEP system of the People’s Bank of China, which is implemented on the basis of a hybrid model. W-CBDC projects are implemented jointly by the central banks of the leading countries, as they require financial and technological unification of settlements. Most projects of W-CBDC involve the use of systems with a convertible or universal digital currency.

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Central Banks Digital Currencies: World Experience

World Economy and International Relations ◽

10.20542/0131-2227-2021-65-5-68-77 ◽

2021 ◽

Vol 65 (5) ◽

pp. 68-77

Author(s):

D. Kochergin

Keyword(s):

Central Bank ◽

Payment Systems ◽

Bank Of Canada ◽

Bank Of China ◽

Digital Currency ◽

Cross Border ◽

Central Bank Money ◽

National Currencies ◽

Bank Money ◽

Retail Payments

Received 28.07.2020. The article examines issues related to the introduction of central bank digital currencies (CBDC) for retail payments and wholesale settlements. The study defines and classifies central bank digital currencies, researches the main models of CBDC systems. The article also analyzes the features of various national projects for issuing Central bank digital currencies. The paper uses methods of economic-statistical and functional-structural analysis. The study concludes that CBDC are a new form of central bank money. Digital currencies can be issued in various issuing systems for the purpose of retail payments or wholesale settlements. Among the models of CBDC systems for retail payments (R-CBDC) the direct system model is the most attractive for its simplicity. This model eliminates the dependence of the Central bank on any financial and payment intermediaries. Models of synthetic and hybrid R-CBDC systems are characterized by reliability and speed in processing multiple transactions which makes them the most promising for implementation. Among the models of CBDC systems for wholesale payments (W-CBDC) the model of the system with a universal digital currency (U-W-CBDC) may be the most suitable for eliminating the main disadvantages of modern cross-border payment systems. However, a large number of technological and financial changes as well as the high operating costs of the U-W-CBDC can make such systems difficult to implement for non-developed financial market infrastructure countries. National financial regulators have different motivations for issuing digital currencies. The main advantages of digital currencies for retail payments may consist in providing users with highly liquid, low-risk, universally available means of payment. The main advantages of wholesale digital currencies are that they offer faster, safer, cheaper cross-border payments. The most advanced projects for issuing R-CBDC can be considered DCEP (People’s Bank of China) E-krona (Central Bank of Sweden). The most successful pilot projects for issuing W-CBDC are the projects Jasper (Central Bank of Canada) and Ubin (Monetary Authority of Singapore), which were able to achieve interoperability in conducting cross-border payments. Currently most CBDC are retail based on the use of distributed ledger technology and implemented in the form of DLT-tokens. Countries that develop digital currency systems can be divided into three groups. The first group is countries where the introduction of CBDC can be designed to support the national demand for central bank money (Sweden, Norway, Singapore, etc.). The second group – countries for which the adoption of digital currencies can afford to keep the place of national currencies in international settlements (USA and EU) or expanding the use of national currencies at the international level (China). The third group represents countries for which the introduction of digital currencies may be associated with the control of national monetary circulation and de-dollarization of the financial system (Uruguay, South Africa, Cambodia, etc.).

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Optimal Hedge Ratio and Hedging Effectiveness in Stock Futures Market: Evidence from National Stock Exchange, India

Restaurant Business ◽

10.26643/rb.v118i3.7637 ◽

2019 ◽

Vol 118 (3) ◽

pp. 137-152

Author(s):

A. Shanthi ◽

R. Thamilselvan

Keyword(s):

Banking Sector ◽

Stock Exchange ◽

Research Work ◽

Futures Market ◽

Least Square ◽

Time Varying ◽

Hedge Ratio ◽

Hedging Effectiveness ◽

Out Of Sample ◽

Optimal Hedge

The major objective of the study is to examine the performance of optimal hedge ratio and hedging effectiveness in stock futures market in National Stock Exchange, India by estimating the following econometric models like Ordinary Least Square (OLS), Vector Error Correction Model (VECM) and time varying Multivariate Generalized Autoregressive Conditional Heteroscedasticity (MGARCH) model by evaluating in sample observation and out of sample observations for the period spanning from 1st January 2011 till 31st March 2018 by accommodating sixteen stock futures retrieved through www.nseindia.com by considering banking sector of Indian economy. The findings of the study indicate both the in sample and out of sample hedging performances suggest the various strategies obtained through the time varying optimal hedge ratio, which minimizes the conditional variance performs better than the employed alterative models for most of the underlying stock futures contracts in select banking sectors in India. Moreover, the study also envisage about the model selection criteria is most important for appropriate hedge ratio through risk averse investors. Finally, the research work is also in line with the previous attempts Myers (1991), Baillie and Myers (1991) and Park and Switzer (1995a, 1995b) made in the US markets

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Can 'Time-Invariant' Hedges Estimated from Time-Varying Hedge Models Outperform Time-Invariant Hedges Even During Period of Financial Crisis? An Empirical Investigation of Indian Futures Market

SSRN Electronic Journal ◽

10.2139/ssrn.1914385 ◽

2011 ◽

Author(s):

Sanjay Kumar Thakur ◽

S. V. D. Nageswara Rao

Keyword(s):

Financial Crisis ◽

Empirical Investigation ◽

Futures Market ◽

Time Varying ◽

Time Invariant

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From an Emerging Economy Perspective: Central Bank Digital Currency Analysis of Turkey

SSRN Electronic Journal ◽

10.2139/ssrn.3436386 ◽

2019 ◽

Author(s):

Aslı Kutlu ◽

Avni Guven

Keyword(s):

Central Bank ◽

Emerging Economy ◽

Digital Currency

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Central Bank Digital Currency, Inflation Tax, and Central Bank Independence

SSRN Electronic Journal ◽

10.2139/ssrn.3581294 ◽

2020 ◽

Author(s):

Ohik Kwon ◽

Seungduck Lee ◽

Jaevin Park

Keyword(s):

Central Bank ◽

Central Bank Independence ◽

Digital Currency ◽

Inflation Tax

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Central Bank Digital Currency, Tax Evasion, Inflation Tax, and Central Bank Independence

SSRN Electronic Journal ◽

10.2139/ssrn.3741816 ◽

2020 ◽

Author(s):

Ohik Kwon ◽

Seungduck Lee ◽

Jaevin Park

Keyword(s):

Central Bank ◽

Tax Evasion ◽

Central Bank Independence ◽

Digital Currency ◽

Inflation Tax

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Is the bottom line reached? An exploration of supervisor bottom-line mentality, team performance avoidance goal orientation and team performance

Human Relations ◽

10.1177/00187267211002917 ◽

2021 ◽

pp. 001872672110029

Author(s):

Yuying Lin ◽

Mengxi Yang ◽

Matthew J Quade ◽

Wansi Chen

Keyword(s):

Goal Orientation ◽

Team Performance ◽

Social Information Processing ◽

Negative Relationship ◽

Bottom Line ◽

Team Members ◽

Processing Theory ◽

Using Data ◽

Exclusive Focus ◽

Avoidance Goal

How do supervisors who treat the bottom line as more important than anything else influence team success? Drawing from social information processing theory, we explore how and when supervisor bottom-line mentality (i.e. an exclusive focus on bottom-line outcomes at the expense of other priorities) exerts influence on the bottom-line itself, in the form of team performance. We argue that a supervisor’s bottom-line mentality provides significant social cues for the team that securing bottom-line objectives is of sole importance, which stimulates team performance avoidance goal orientation, and thus decreases team performance. Further, we argue performing tension (i.e. tension between contradictory needs, demands, and goals), serving as team members’ mutual perception of the confusing environment, will strengthen the indirect negative relationship between supervisor bottom-line mentality and team performance through team performance avoidance goal orientation. We conduct a path analysis using data from 258 teams in a Chinese food-chain company, which provides support for our hypotheses. Overall, our findings suggest that supervisor’s exclusive focus on the bottom-line can serve to impede team performance. Theoretical contributions and practical implications are discussed.

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