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)
The global monetary system remains one of the least understood yet most consequential structures shaping modern economic life. Despite its centrality to financial stability, international trade, and monetary policy, the mechanisms through which money is created, distributed, and recycled across borders remain obscured by institutional complexity and academic neglect. This
The rise and fall of the shadow banking system—as chronicled by Zoltan Pozsar in his seminal 2008 article—offers a crucial case study in how modern financial innovation evolved under faulty assumptions, and ultimately destabilized the global monetary order. From a systemic perspective, the story is not merely one
Banking and Blockchain
The global trading system stands at a crossroads, as outlined in Stephen Miran’s study, A User’s Guide to Restructuring the Global Trading System. The study suggests that the persistent overvaluation of the U.S. dollar, driven by the inelastic demand for reserve assets, is at the heart of
Central Banks and CBDCs
* Utah prepares to pass a bill for Bitcoin reserves starting May 2025: https://legiscan.com/UT/text/HB0230/2025 * Montana planned to create a bitcoin reserve as early as July 2025, but the bill was rejected by House lawmakers on February 22 (voted 41-59): https://legiscan.com/MT/text/HB429/
Banking and Crypto Regulations
The European Union's Digital Operational Resilience Act (DORA) is said to be transformative regulation for the financial sector. It aims to strengthen resilience against cyber threats and ICT disruptions, requiring financial institutions and their third-party service providers to implement comprehensive risk management, incident response, and continuous monitoring strategies.
Banking and Crypto Regulations
Introduction The rapid evolution of cryptocurrencies has transformed them from niche financial instruments into a significant asset class. This development brings new opportunities for investors but also introduces complex legal and regulatory challenges. This article explores key aspects of the cryptocurrency landscape, including: Emerging Opportunities * Cryptocurrencies and blockchain technology as
Banking and Blockchain
The repurchase agreement (repo) market is a fundamental component of the global financial system, serving as a crucial mechanism for short-term funding and liquidity management. By allowing financial institutions to engage in collateralized borrowing and lending, the repo market facilitates efficient capital allocation, enhances market liquidity, and supports the functioning
Banking and Crypto Regulations
Introduction The introduction of the Markets in Crypto-Assets Regulation (MiCAR) marks a watershed moment in the regulation of cryptocurrencies and related services within the European Union (EU). Effective December 30, 2024, MiCAR is directly applicable to all crypto-asset service providers across the EU. Its primary objective is to harmonize the
Banking and Crypto Regulations
The Markets in Crypto-Assets (MiCA) regulation, adopted in 2023 and starting working in 2024, is already being described as a game-changing framework that, if it succeeds, may establish Europe at the forefront of global crypto regulation. While many celebrate its potential to bring clarity and uniformity to a fragmented market,
AI and Banking
Activist Treasury Issuance (ATI) - a concept introduced by Hudson Bay Capital describes how the U.S. Treasury dynamically manages financial conditions by adjusting the maturity profile of its debt issuance. By tilting issuance toward short-term Treasury bills and away from long-term notes and bonds, ATI reduces the amount of
Banking and Blockchain
The recent post by Andreessen Horowitz’s a16z on the transformative potential of stablecoins in the payments ecosystem highlights a revolutionary shift in how value can be transferred globally, with stablecoins positioned at the heart of this transition. The article outlines several key points: stablecoins, leveraging blockchain technology, promise faster
Banking and Blockchain
The collaboration between the Digital Dollar Project (DDP) and the Depository Trust & Clearing Corporation (DTCC) represents a groundbreaking step toward modernizing post-trade securities settlement using Central Bank Digital Currency (CBDC). The project explored how tokenized securities and a simulated CBDC can reshape the settlement landscape, enhancing efficiency, reducing risks,
Banking and Blockchain
The dawn of the sixth technological wave heralds a profound transformation across all facets of human activity, from manufacturing and science to commerce and governance. This new era is defined not by discrete technological advancements but by the seamless integration of breakthroughs such as artificial intelligence, additive manufacturing, photonics, virtual
Digital Infrastructure
Understanding Foundational Blockchain Software Blockchain technology relies on essential software to function effectively. In this article, we’ll explore the foundational components of blockchain software, focusing on their usability, stability, and the challenges of implementation. Rather than delving into technical coding details, we’ll examine how popular crypto projects structure