From Bitcoin to Central Bank Digital Currencies: Making Sense of the Digital Money Revolution

Cunha, Paulo Rupino da; Melo, Paulo; Sebastião, Hélder

doi:10.3390/fi13070165

Cited by 72 publications

(31 citation statements)

References 45 publications

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“…Our paper is related to a growing strand of literature on the volatility of Bitcoin and other major cryptocurrencies (e.g., Salisu and Ogbonna 2021;Shahzad et al 2021) during the COVID-19 outbreak, when uncertainty in the global economy and financial markets spiked and the prices of global equity indices tumbled. Notably, Bitcoin and other major cryptocurrencies experienced large increases in their prices from the second quarter of 2020 until most of 2021, driven by an accentuated trend towards digitalisation and acceptance of Bitcoin as a means of payment by large corporations (e.g., Tesla) as well as possibilities of central banks and emerging economies to adopt cryptocurrencies (Cunha et al 2021). Our contributions are on two fronts.…”

Section: Introductionmentioning

confidence: 99%

Outliers and Time-Varying Jumps in the Cryptocurrency Markets

Dutta

Bouri

2022

JRFM

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We examine the presence of outliers and time-varying jumps in the returns of four major cryptocurrencies (Bitcoin, Ethereum, Ripple, Dogecoin, Litecoin), and a broad cryptocurrency index (CCI30). The results indicate that only Bitcoin returns are contaminated with outliers. Time-varying jumps are present in Bitcoin, Litecoin, Ripple, and the cryptocurrency index. Notably, the presence of jumps in Bitcoin is significant after correcting for outliers. The main findings point to a price instability in some major cryptocurrencies and thereby the importance of accounting for large shocks and time-varying jumps in modelling volatility in the debatable cryptocurrency markets.

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Section: Introductionmentioning

confidence: 99%

Outliers and Time-Varying Jumps in the Cryptocurrency Markets

Dutta

Bouri

2022

JRFM

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“…T HE rapid emergence of blockchain distributed ledger technology (DLT) [1], [2] and numerous cryptocurrencies such as Bitcoin and its competitors, which are not backed by any government, raises concerns about the stability of financial marketplaces and the conservancy of monetary policy. In response, many central banks (CBs) and monetary authorities worldwide have begun to conduct research on central bank digital currencies (CBDCs) [3], [4]. CBDC is a digital form of fiat currency, which is supplied and controlled by the respective CB.…”

Section: Introductionmentioning

confidence: 99%

A Privacy-Preserving Transparent Central Bank Digital Currency System Based on Consortium Blockchain and Unspent Transaction Outputs

Islam

Lee

2023

IEEE Trans. Serv. Comput.

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There is rising global demand for the deployment of a central bank digital currency (CBDC) system to achieve financial stability. However, striking a balance between privacy, transparency, and auditability in such a system is technically difficult. We propose a CBDC system based on a consortium blockchain that adopts a privacy-preserving, transparent unspent transaction output (UTXO) model. The proposed system satisfies the travel rule of payment, unlike existing cryptocurrencies. Unlike the conventional UTXO approach, users use wallet-linked addresses for transactions rather than their actual wallet addresses. Each transacting address is generated using two keys: a random private key computed by the sender and the recipient's public key. The final private key is known only to the recipient, and it is required to spend the UTXO received using the address. Thus, each user holds only a single authorized public key and address, which eases regulatory compliance in the network without compromising anonymity and privacy. To manage the blockchain, the central bank and several certificate authorities execute the energy-efficient Clique consensus algorithm. Only the central bank supplies money to the network. A prototype of the system was implemented using Python-Flask, and it outperformed the state-of-the-art systems by providing a smaller transaction size (665 B) and lower verification time (9 ms).

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“…For example, smart contract powered by blockchain could improve the efficiency of the financial market and optimize corporate governance. Also, the various central bank starting to establish digital currencies is another example to show the influence of blockchain on the financial sector (Cunha et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Recordism: A social-scientific prospect of blockchain from social, legal, financial, and technological perspectives

Li¹,

Xu²,

Yang³

et al. 2022

Preprint

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Blockchain has the potential to reform the architecture of cyberspace and transform the storage, circulation and exchange of information through decentralization, transparency and de-identification. Meaning that ordinary participants can become traders, miners, retailers, and customers simultaneously, breaking the barriers and reducing the information gap between participants in the community, contributing to the futuristic metaverse with an open progressive and equal ideology. Such information transformation empowered by blockchain also profoundly impacts our methodological cognition, legal governance on cyberspace and financial and technological development.This study explores the main question: what are the implications of the blockchain-driven information revolution for society and social sciences? In order to answer this main question, this paper chooses four perspectives, which are methodological, legal, financial and technical. By analysis of these four perspectives, this paper is expected to provide a more comprehensive analysis of the blockchaindriven impact on society, social sciences, and technology to contribute to current scholarships. Additionally, regarding blockchain as an innovative methodological cognition, it grows on top of other technologies while helping advance other technologies. This paper concludes that although there are few frictions between blockchain and current social architecture, blockchain is so much more than the technology itself,

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From Bitcoin to Central Bank Digital Currencies: Making Sense of the Digital Money Revolution

Cited by 72 publications

References 45 publications

Outliers and Time-Varying Jumps in the Cryptocurrency Markets

Outliers and Time-Varying Jumps in the Cryptocurrency Markets

A Privacy-Preserving Transparent Central Bank Digital Currency System Based on Consortium Blockchain and Unspent Transaction Outputs

Recordism: A social-scientific prospect of blockchain from social, legal, financial, and technological perspectives

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