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Tag Archives: fintech

El Salvador’s great crypto experiment

Can bitcoin surpass the dollar in popularity and make El Salvador the first state to operate entirely with a private currency? By: Maria Demertzis Date: September 14, 2021 Topic: Finance & Financial Regulation This piece was original published in Money Review and is forthcoming in El Economista. In September 2021, the government of El Salvador became the first to make bitcoin legal tender. This means it can now be used to make payments and settle debts, if businesses have...

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Fintech adoption during epidemics depends on pre-existing inequalities

The Covid-19 pandemic has increased remote working, online shopping, and telehealth, with important differences across socioeconomic groups in their ability to use such new technologies. Orkun Saka, Barry Eichengreen and Cevat Giray Aksoy investigate past epidemics and find that they significantly increase the likelihood that individuals do their banking using the internet, mobile banks, and automated teller machines (ATMs). But inequality plays a role. Individuals who already have...

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Crypto… mania

Cryptocurrencies are here to stay but are unlikely to be considered a credible alternative to money anytime soon. This opinion piece is forthcoming in the Money Review section of Kathimerini and El Economista. Cryptocurrencies are here to stay. Coin Market Cap, a popular information site on all things crypto, lists close to 10,000 of them. The name suggests that they are currencies and most of them are, in that they have a value and are accepted as a means of payment. But they cannot be...

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Central bank currencies going digital

Electronic cash might be the future, but it is still unclear what payment innovation it offers for the public, certainly in the euro area. And it is unlikely to fully replace the comfort the consumer feels in having money under the mattress. This opinion piece was originally published in the Money Review section of Kathimerini and is forthcoming in El Economista. Central banks often update the money they issue to include new features. The next update will be to introduce a digital version...

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How not to spend it

Buying a car, a house or a cryptocurrency has never been easier: with a simple click, digital banking has made financial operations accessible to everyone. But, while Fintech has become widespread, financial literacy does not seem to keep up the pace. This week Maria Demertzis and Nicholas Barrett are joined by Annamaria Lusardi, Denit Trust Endowed Chair of Economics and Accountancy from George Washington University School of Business to discuss financial literacy.Digital banking has made...

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The economic potential and risks of crypto assets: is a regulatory framework needed?

What is the economic potential and the risks of crypto assets? Regulators and supervisors have taken great interest in these new markets. This Policy Contribution is a version of a paper written at the request of the Austrian Presidency of the Council of the European Union for the informal ECOFIN meeting of EU finance ministers and central bank governors. This Policy Contribution is a version of a paper written at the request of the Austrian Presidency of the Council of the...

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Capital Markets Union and the Fintech Opportunity

Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Complementing Europe’s bank-based system with deeper capital markets and more cross-border financial integration promises benefits, but despite long-running debate and policy action, financial system change remains slow. Fintech has...

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The Bitcoin Bubble

The price of bitcoin has just passed $11,000. A year ago it was worth less than $800. Economists and commentators are thus increasingly concerned that this may be a bubble waiting to burst. We review recent opinions on the topic. The price of Bitcoin has reached and passed $11,000, from $800 just one year ago (Figure 1). The Economist’s Buttonwood’s notebook thinks that while the stock market has been trading at high valuations for some time, there is nothing like the excitement about...

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Capital Markets Union and the fintech opportunity

Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Policymakers need to consider four questions urgently: Develop a European or national fintech market? What regulatory framework to pursue? Should supervision of fintech be exercised at the European level? What is the overall vision for the...

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Cryptoeconomics – the opportunities and challenges of blockchain

While the activities using the peer-to-peer cryptocurrency Bitcoin swing between legal and illegal, the attention has been increasingly shifting to the technology underlying Bitcoin, known as blockchain. The mechanics and economics of Bitcoin have been reviewed in a previous Bruegel blogpost. In this blog review we explain, or at least attempt to, what blockchain is and whether it contains the extraordinary innovation potential that its proponents believe it to have, or perhaps such hype is...

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