Central Banks and CBDCs
Briefly, this article can be applied to multiple jurisdictions, even though the focus today is on euro area stablecoins. The argument, however, generalises easily: the risks attributed to stablecoins are far less dramatic than many commentary pieces suggest. More specifically, this text is written as a response to the growing
Banking and Blockchain
In recent months, there has been growing discussion around the potential risks posed by tokenised money market funds (MMFs) to financial stability. The narrative goes that these funds, by bridging traditional finance and the cryptoasset ecosystem, could create new channels of contagion and amplify volatility through automated redemption mechanisms and
The United States needs lower interest rates, not as a matter of cyclical stimulus but as a structural necessity. The fiscal architecture no longer supports sustained high yields. With interest payments on the national debt now consuming a larger share of tax revenue than defense spending and with deficits projected
The repo market is often described as the beating heart of modern finance, a vast, intricate network that keeps liquidity circulating through the arteries of the global financial system. Every day, trillions of dollars of securities are exchanged for cash, with agreements to reverse the transaction at a later date.
A few days ago, Christine Lagarde made waves at a conference in Lisbon when she expressed, let’s say, a certain skepticism about the benefits of stablecoins, arguing that they would in effect lead once again to the “privatization of money”. At first glance - or if we look at
The world is not witnessing a sudden collapse of the dollar-based system. It is instead drifting—methodically, almost imperceptibly—into a fragmented monetary environment. This is not a revolution, but a shift in structural architecture. The old model, defined by a singular reserve currency, unified capital pools, and centralised liquidity
At its core, the emerging DeFi lending market is built around a simple but powerful mechanism: * Depositors in DeFi provide USD liquidity. * Borrowers use that liquidity to fund leveraged crypto basis trades — typically the difference between perpetual swaps and spot prices across exchanges. This means that DeFi borrow rates are
By Alexandru-Ștefan Goghie Published in: Competition & Change, Vol. 28(5), 2024 I. Introduction: The Paradox of Blockchain and Traditional Power This paper addresses a compelling paradox in the financial world: while blockchain technology emerged as a challenge to traditional centralized finance—particularly banks—it is now being integrated into
In the previous articles "Can new Settlement Structure save our financial system?", "Collateral + Blockchain = Stability" and "Changing the structural integrity of global interbank finance" we explored the systemic frictions in the settlement layer of the repo market, its critical weak point - rehypothecation, and
In the previous articles "Can new Settlement Structure save our financial system?" and "Collateral + Blockchain = Stability" we explored the systemic frictions in the settlement layer of the repo market and its critical weak point - rehypothecation. In this last article we will explore the problem of
In the previous article "Can new Settlement Structure save our financial system?" we explored the systemic frictions in the settlement layer of the repo market and how these can be addressed through integration of blockchain and tokenization solutions. In this article I will touch on another critical weak
Settlement in the repo market, despite its critical role in global liquidity, operates on aging infrastructure built around T+1 or T+2 conventions, meaning actual delivery of cash and securities occurs up to two days after trade agreement. This latency isn’t merely operational—it constitutes embedded credit exposure.
Predictability of the Majority As external uncertainty rises, the behaviour of firms and their stakeholders simplifies. The worse they are at decoding the signals coming from the environment, the narrower and more predictable their behavioural repertoire becomes. This fallback to default settings lets the actors of a business ecosystem keep
The U.S. dollar’s centrality to the global financial system is rooted not only in its function as the dominant reserve and transaction currency, but also in the infrastructure that enables its movement—namely, the interconnected systems of clearing and settlement. These systems, primarily composed of Fedwire, CHIPS, and
The Trans-European Automated Real-time Gross Settlement Express Transfer system, more commonly referred to as TARGET, represents the core of the Eurozone’s payment infrastructure. As the real-time gross settlement (RTGS) mechanism for the euro, it plays a pivotal role in enabling cross-border payments within the Economic and Monetary Union (EMU)
