National Currency Research Articles

Развитие экспорта как драйвера российской экономики

The article is devoted to the consideration of Russia's export potential under conditions of sanctions pressure from unfriendly states. Export is an integral element of Russia's foreign economic policy and affects the stability of the national currency. Further expansion of exports is determined by the ability to overcome sanctions restrictions and adapt to them. In recent years, there has been a need to develop non-resource non-energy exports (NNE) of high and medium value added products in production, since the basis of Russian budget revenues in the form of oil and gas revenues did not make the proper contribution and decreased in 2023 by 23.9% compared to 2022, oil exports fell by 3.3%, and gas by 30% in physical terms.

High-denomination bills or value-adjusted billes? Reprospective analysis of the reform of the congolese range of banknotes in 2012 and lessons to be learned.

In the Congolese collective memory, the injection of new banknotes, especially with high face value, is a harbinger of rampant inflation and a depreciation of the national currency. The unfortunate experiences of the 1990s are at the origin of the psychological equality “big bills = rising prices”. However, the adaptation of the fiduciary range that took place in 2012 showed that the methodical introduction of a new range of paper money can be painless for the economy and provide it with certain advantages. More than ten years after this success, this article reviews the strategies put in place at the time to achieve it. It highlights the consolidation of macroeconomic stability and a communication strategy thanks to which the expectations of economic agents have ceased to be retrospective to become forward-looking.

Новеллы правового регулирования вывозных таможенных пошлин

The article discusses innovations in the legal regulation of export customs duties established by the Government of the Russian Federation. The author analyzes the legal nature of the introduced rates of export customs duties, the amount of which depends on the exchange rate of the national currency, formulates proposals for amending the legislation regulating customs relations in the Russian Federation in order to protect the rights of persons exporting goods for personal use, as well as preserving state resources organs.

Перспективы трансформации системы международных расчетов в Российской Федерации на базе цифровых валют центральных банков

Fragmentation of the global financial and economic space and difficulties in the organization of international settlements cause the restructuring of the international settlement system of the Russian Federation. Russia’s need for a reliable system of international settlements is due to its rapid involvement in the system of international trade, the need for high-tech imports, sales of raw materials and high-grade goods. One of the most promising options for a new design of payment infrastructure protected from sanctions pressure is the creation of an international payment system based on the peer-to-peer model using central bank digital currencies (CBDC). The Committee on Payment Infrastructures is actively theorizing this model. To date, the Russian Federation (digital ruble) and the People's Republic of China (digital yuan) demonstrate a high level of readiness to make settlements in the CBDC. The creation of a payment system based on CBDC fundamentally changes the entire landscape of international settlements, not only reducing the cost of transactions, but also ensuring their reliability, transparency and protection from the negative influence of other countries. Of particular interest is the model of clearing using CBDC in BRICS countries, which will allow for centralized netting of mutual positions of the countries in national currencies and gradual displacement of currencies of developed countries from mutual settlements.

REINVESTIGATING THE IMPACT OF GROSS DOMESTIC SAVINGS, EXCHANGE RATES, AND NATIONAL DEBT ON MILITARY EXPENDITURE IN MALAYSIA

This study uses the ARDL method to explore how national debt relates to military expenditure, considering both short and long timeframes. In the short term, the research finds that changes in national debt don't strongly impact military expenditure right away. Interestingly, a stronger national currency is associated with lower short-term military expenditure. Additionally, higher domestic savings positively affect military expenditure in the short term, highlighting the role of local resources. In the long term, the study shows that all considered factors such as national debt, exchange rates, and domestic savings are positively contributed to military expenditure. This suggests that over time, increases in these factors are linked to higher military expenditure. Overall, the study highlights the complex connections between national debt, economic factors, and military expenditure, offering insights into both immediate and long-term influences on defense budget choices.

Реформування міжнародних фінансових організацій в контексті впливу на соціально-економічний розвиток України та Казахстану

The article presents the results of a study on current problems of reforming the international financial architecture under the expanding crisis phenomena of a financial nature and the vulnerability of financial markets and public finances to sharp economies political and geopolitical changes. The meta-statistics are aimed at identifying the main institutional fundamentals of the reform of international financial organizations in the context of the transformation of mutual relations with certain neighboring groups of countries and their impact on the socio-economic development in Ukraine and Kazakhstan. Systematized the main guidelines in the transformation of international financial architecture, such as: reform of certain international organizations; changes in the policy of cooperation between individual countries and international financial organizations, transformation of the latter’s influence; creation of a global institution based on international multilateral agreements; strengthening the regulatory mechanisms of international financial law and increasing the responsibilities of national regulators for the functioning of individual segments of financial markets; facilitating reforms of the global financial architecture to achieve the goals of global development and climate change; creation of new international financial institutions etc. The impact of the reforms of international financial organizations on the socio-economic development of Ukraine and Kazakhstan is manifested in the changes in the directions of Kazakhstan’s and Ukraine’s cooperation with modern international institutions, culminating in the updated policy frameworks and special programs for market reform, in ensuring the stability of the national currency, in the solution of socio-economic problems, in financing the deficit of the sovereign budget and in balancing the balance of payments. The allocation of financial resources of a credit and investment nature is accompanied by recommendations on the institutional development of market economy, reforms of the necessary legal framework, development of the private sector and the shaping of a corporate governance system. A comparative analysis of the effectiveness of Kazakhstan’s and Ukraine’s cooperation with international financial organizations allows us to recognize the vulnerability of both countries’ financial systems to crisis phenomena of a global nature, including through the growth of the foreign debt and their weak positions in terms of the EBRD Financial Market Development Index in 2020 compared to the European countries, which became EU members 2004.

INSTITUTIONAL BASIS OF CRYPTOASSETS’ REGULATION

INSTITUTIONAL BASIS OF CRYPTOASSETS’ REGULATION

Decentralized Cryptocurrency Exchange Using Blockchain

In today's technology-driven world, ensuring robust security is of paramount importance. Blockchain technology has emerged as a pivotal solution, eliminating intermediaries andfortifying security measures. Cryptocurrencies represent the pioneering digital assets successfully managed through blockchain, attracting financial institutions to integrate them intotheir portfolios, fostering widespread adoption and interest among various stakeholders, including the banking sector, government, and individual investors. The potential for cryptocurrencies to evolve into the global currency of the future, supplanting fiat currency, is an intriguing possibility. This research project aims to offer a comprehensive insight into the cryptocurrency market, encompassing its origins, core characteristics, price dynamics, market capitalization, and trading volumes. Additionally, it will delve into critical concepts such as Ethereum, smart contracts, tokens, and consensus algorithms, which are instrumental to the cryptocurrency market's functioning Keywords: Blockchain, Cryptocurrencies, Ethereum, Smart Contracts, Token, ConsensusAlgorithm.

Central Bank Digital Currencies and financial integrity: finding a new trade-off between privacy and traceability within a changing financial architecture

In an increasingly digitised world, and within the new reality of digital finance, a fully digitised public currency seems to be a natural step. To this end, central banks have been testing the possibility to issue a digital form of the traditional fiat currency (so-called Central Bank Digital Currency-CBDC). As these projects steadily progress, and in some cases, reach the implementation phase, a myriad of questions, from legal to macroeconomic, arise. This paper aims to focus, in particular, on two complementary and co-related aspects involving CBCDs: (i) how can the full digitalisation and centralisation of the transaction ledger be combined with privacy and (ii) to what extent CBDCs affect the allocation of burden and the responsibility over supervision of retail transactions. Eminently, the use of cash ensures a form of default privacy that protects the individual against State and private intrusion. While this privacy has caused concern, due to its criminogenic potential, and has been consequently limited by anti-money laundering (AML) regulations, the remaining cone of shadow cash guarantees is a crucial limit to control. In the context of a shifting financial system, undergoing deep transformation due to increasing datafication and decentralisation of the market, a new governance of financial supervision and record-keeping—up to now based on a unique and centralised ledger—is crucial to redefine the trade-off between financial integrity and privacy. This article will examine the origins and characteristics of CBDCs, to then analyse how the trade-off between control and privacy is set to reshape this new architecture.

Can fiat currencies really hedge Pax gold? Evidence from range-based DCC models

PurposeThis paper assesses the co-movement between Pax gold and six fiat currencies. It also investigates the optimal time-varying hedge ratios in order to examine the properties of Pax gold as a diversifier and hedge asset.Design/methodology/approachThis paper examines the volatility spillover between Pax gold and fiat currencies using the framework of wavelet analysis, BEKK-GARCH models and Range DCC-GARCH. Moreover, this paper proposes to use the covariance and variance structure obtained from the new range DCC-GARCH framework to estimate the time-varying optimal hedge ratios, the optimal weighs and the hedging effectiveness.FindingsWavelet coherence method reveals that, at low frequency, large zone of co-movements appears for the pairs Pax gold/EUR, Pax gold/JPY and Pax gold/RUB. Further, the BEKK results show unidirectional (bidirectional) transmission effects between Pax gold and EUR, GBP, JPY and CNY (INR, RUB) fiat currencies. Moreover, the Range DCC results show that the Pax gold and the fiat currency returns are weakly correlated with low coefficients close to zero. Thus, Pax gold seems to serve as a safe haven asset against the systematic risk of fiat currency markets. In addition, the results of optimal weights show that rational investor should invest more in Pax gold and less in fiat currencies. Concerning the hedge ratios results, the findings reveal that the INR (JPY) fiat currency appears to be the most expensive (cheapest) hedge for the Pax-gold market. However, the JPY’s fiat currency appears to be the cheapest one. As for hedging effectiveness results, the authors found that hedging strategies including fiat currencies–Pax gold pairs are most likely to sharply decrease the portfolio’s risk.Practical implicationsA comprehensive understanding of the relationship between Pax Gold and fiat currencies is crucial for refining portfolio strategies involving cryptocurrencies. This research underscores the significance of grasping volatility transmissions between these currencies, providing valuable insights to guide investors in their decision-making processes. Moreover, it encourages further exploration into the interdependencies of digital currencies. Additionally, this study sheds light on effective contagion risk management, particularly during crises such as Covid-19 and the Russia–Ukraine conflict. It underscores the role of Pax Gold as a safe-haven asset and offers practical guidance for adjusting portfolios across various economic conditions. Ultimately, this research advances our comprehension of Pax Gold’s risk-return profile, positioning it as a potential hedge during periods of uncertainty, thereby contributing to the evolving literature on cryptocurrencies.Originality/valueThis study’s primary value lies in its pioneering empirical examination of the time-varying correlations and scale dependence between Pax Gold and fiat currencies. It goes beyond by determining optimal time-varying hedge ratios through the innovative Range-DCC-GARCH model, originally introduced by Molnár (2016) and distinguished by its incorporation of both low and high prices. Significantly, this analysis unfolds within the unique context of the Covid-19 pandemic and the Russian–Ukrainian conflict, marking a novel contribution to the field.

Accounting for complementary currency transactions (the case for France)

The purpose of the study was to analyze the complementary currencies projects (СС-projects) implemented in France during the last decades. The active promotion of those projects in various countries has highlighted the problem of accounting and tax accounting for transactions of the currencies supplementing the national ones as a means of payment. There were questions about how to reflect and record such payments in invoices; whether it is necessary to purchase additional software for the cash register, etc. The author of the article proved that the use of complementary currencies does not significantly affect the billing and cash accounting, as well as the collection of commercial taxes, since the sales are always recorded in the national currency and in the same currency are transferred to accounting for further documentation (in this case, in euros). The tax reporting within the CC-projects is identical to the standard formalized one, however, the payment terms contained in it include an additional payment method. the methodological basis of the study was a system- functional approach and comparativistics. the results of the work have revealed the specifics and key problems of forming a legislative framework for innovative projects aimed at introducing new effective payment instruments into the sphere of commodity- money relations at the regional and local levels, and may be of interest to economists and representatives or specialists of taxation and financial services of Russia.

Cryptocurrency and Financial Stability

This paper introduces cryptocurrency into a two-country open-economy model. Based on the theoretical model, we employ the TVP-VAR model to study the dynamic interdependence among interest rate spread (a proxy in the monetary market), exchange rate (a proxy in the forex market), and Bitcoin transactions (a proxy in the cryptocurrency market). The key finding is that Bitcoin has an effect of de-fiatization in the global financial market. When there is a higher divergence in monetary policy between the US and China, Bitcoin attracts greater attention with a higher price, posing a competing force against USD. When there are greater fluctuations in the exchange rate of USD/CNY, Bitcoin diverts investors from CNY. The fiat currencies of the two largest economies are both losers while Bitcoin gains. Therefore, cryptocurrency not only decentralizes the role of commercial banks as a medium of payment, but also decentralizes the role of central banks as a monetary policymaker. In face of this challenge, it is suggested that central banks should embrace blockchain technology and develop their own digital currency to restore the trust lost in the global financial crisis. International collaborations in terms of regulation are necessary given its borderless and authority-less feature.

Asset-Based Money Systems in a Global Context: Implications for Social Inclusion and Economic Development

Fiat money based financial system has disturbed the balance between household demand and firm supply. Further, government monetary intervention to curb inflationary demand is hurting production via the cost of capital and disturbing the functionality of the financial system in terms of capital market misallocation. These aspects are trickling down to cause social disturbance in the economy. Corresponding to it, the gold standard or at least assets-based money promotes social inclusion, empowers marginalized communities, and addresses socio-economic challenges by using tangible assets as a monetary system. The study explores assets-based money’s theoretical foundations, distinguishing it from traditional debt-based models and its potential benefits on social inclusion. It analyzes potential benefits, challenges, and limitations in implementing assets-based money systems. Several empirical studies explored debit cases of Islamic and conventional finance sectors, but this study examines the high power money and social inclusion in the economy. For this determination, the quantitative research approach consisted of selected 143 countries panel data of conventional and Islamic financial statements from 1960-2022. The model contains regression estimates, descriptive analysis, and correlation coefficient analysis. The assets-based money boosts living standards and positively impacts poverty reduction. This money reduces the inflationary effects of monetary expansion, hurting the purchasing power of low-income groups. Further, it is expected to have a growth-promoting effect via risk sharing and resource distribution. Assets-based money can support economic growth, financial stability, and inclusive development through a well-designed implementation strategy, but success depends on thorough research and analysis.

STRATEGIES OF TOURISM DEVELOPMENT FOR UKRAINE IN THE CONDITIONS OF MILITARY OPERATIONS AND THE POST-WAR PERIOD

The article examines the current features of the tourism sector in Ukraine. The role of external factors in the process of ensuring the effective development of the tourism industry is noted. The author highlights the main factors that contributed to the growth of outbound tourism in Ukraine: the introduction of a visa-free regime with the EU countries, the expansion of air travel and the opening of direct flights, the growth of low-cost tours, the growth of purchasing power of Ukrainians, and the strengthening of the national currency. However, quarantine restrictions closed airports, emptied hotels, and reduced demand for travel agency services. And as soon as the industry began to recover from the coronavirus, Russia's full-scale invasion of Ukraine again dealt a severe blow to the travel business. It is proved that an important feature of the tourism business is its dependence on sharp seasonal fluctuations in demand for the tourism product. The research results show that outbound tourism in Ukraine has a pronounced seasonality. Further growth in demand for outbound tourism is noted, which in the future will ensure an even greater outflow of foreign currency, which will negatively affect the country's balance of payments and gross domestic product. The main trends in the context of the impact of the level of population income on the development of outbound tourism are identified. The full-scale Russian invasion has had a negative impact on all sectors of the economy. The Ukrainian tourism sector has suffered the most. The closed skies, restrictions on men traveling abroad, and the forced relocation of a large part of the population have certainly limited the ability to travel. As a result of the negative impact of external factors, there has been a drop in demand for foreign tourism and the willingness of a significant proportion of the population to reorient to the consumption of recreational services in Ukraine. Under these conditions, it is of particular importance to study issues related to improving the efficiency of this industry, as well as expanding the range and range of services provided. It is worth noting the growing impact of the tourism industry on the nature of socio-economic processes within urban and rural communities. The growing demand for green and ethnic tourism opens up broad prospects for development for family businesses, as these areas do not require significant material costs as stratum capital. At the same time, there is a question of the proper qualification level of persons planning to realize themselves in the hospitality business, and there is a need for proper organizational and informational support in this area. This, in turn, necessitates the optimization of the theoretical and methodological framework and methodological tools.

Statistical Study of the Russian Financial System under Sanctions

Purpose of the study. The imposition of sanctions on the financial sector and suspending relations with international financial institutions in 2022 has significantly affected the external conditions for the development of the domestic financial sector, caused an increase in geopolitical tensions and instability in the Russian currency market. It is necessary to study and understand the processes currently taking place in the financial market. The article is devoted to the statistical assessment of the impact of sanctions on the Russian financial system in 2022 and 2023. The purpose of research paper is to identify the situation on the currency, money and credit, debt market, as well as in the budgetary sphere, to assess the relationship between the dynamics of key financial indexes in the sanctions crisis. Materials and methods. The sources of information for the calculations were official data from the Ministry of Finance of the Russian Federation, the Bank of Russia, the provider of data on financial markets Cbonds and PJSC “Moscow Exchange”. The article used statistical methods of analysis: variations, dynamics, hypothesis testing. Determination of anomalous levels of the time series was carried out using the Irwin method. Differences in average federal budget indexes were assessed using the Wilcoxon Matched Pairs Test. The dependence of the dynamics of the main financial indexes was assessed on the basis of time series correlation. Results. The study allowed us to conclude that 2022 was a critical year for the Russian financial system. All its sectors were affected by sanctions restrictions. The weakening of the national currency was revealed in the currency market, and it was found that the dollar exchange rate in 2023 was abnormally high for the period from 2000 to 2023. The budget sector hasdemonstrated stability. The results of the study showed that the sanctions pressure did not affect the revenue part of the federal budget. However, the average monthly expenditure of the federal budget increased statistically significantly by almost three times in 2022. The monetary market reacted with an excessive supply of money. The increase in the money supply has reached its highest value in the last 10 years. The money supply growth was accompanied by changes in its structure. The banking sector showed the development of the credit growth trend. The debt market reacted with a rapid growth of corporate bonds volume, the highest for the last 10 years. And the market of federal loan bonds was characterized by a rapid reduction in the volume of federal loan bonds owned by non-residents and a decrease in the share of non-residents. The interrelation between the dynamics of the US dollar exchange rate and the volume of corporate lending associated with the conversion of loans in US dollars and euros into yuan was revealed. Direct interrelation was observed in the dynamics of money supply and the volume of corporate bonds and federal loan bonds market. Conclusion. The financial system is adapting to new circumstances. The transformation of methods and tools of financial regulation accompany this process. This process requires studying and understanding changes in the composition, dynamics, and interconnection of the structural elements of the financial system, as well as finding ways for its development.

Investigating Statistical Features of the FX Bid Ask Series in a Small Economy with a Sizeable Informal Economy

The assessment of the effect of the informal use of a foreign currency on the corresponding FX rates toward the national currency is a very difficult task, requiring direct calculation and modeling. It comes mostly because of the unknown quantity of foreign money used in the informal sector, but also because of the lack of quantitative calculation models. To overcome this gap and to realize a qualitative description of this effect in a concrete economic environment, we propose herein a comparative analysis between the behavior of two typical FX rate series recorded in the Albanian currency market, the Euro-ALL and USD-ALL, providing that the Euro is used commonly as a national currency substitute in the informal economy and the USD is not. So, we have evidenced that the un-stationarity degree of the Bid and Ask spread distribution for the Euro-ALL FX series is higher than for the corresponding USD-ALL case, but with a lower variance. Those features occurring simultaneously can be explained by assuming that informal use of the Euro acts as an additional perturbation on the FX system, imposing high nonstationary, but at the same time it provides reservoir or source features for the money disbalances, reducing the average fluctuations. Next, the depth of the market measured by the average Bid-Ask Spread has resulted in a smaller price for the Euro currency, indicating a lower cost of the transactions and reinforcing the assumption regarding the distribution’s in-stationarity features. Based on those indicatory findings, we propose to realize indirect evidence for our assumptions by comparing the reproduction of the corresponding distribution using autoregressive models. In this case, we have evidenced that the distribution of the FX Euro-ALL spread can be reproduced better if we include in standard ARCHX (m, n, p) models a term that mimics the informality measure. When applying the same procedure for the USD-ALL spread, the resulting distribution has not matched equally well with the original ones. Those findings have been discussed in the framework of an alternative description of the effect of the informal use of foreign currency in a small economy with a sizeable informal sector, which convene our current system under analysis, but we believe that they can be applicable for similar economic environments. Doi: 10.28991/HEF-2024-05-01-02 Full Text: PDF

An Exploration of the Money Laundering Associated with the Bitfinex Bitcoin Hack

ABSTRACT Bitcoin, launched in 2009, has gone through inconspicuous years, halcyon years, and now, the chaos years. Writers predicted that bitcoin would replace fiat currencies and the underlying technology, blockchain, would significantly reduce the need for auditors. However, there have been numerous major cryptocurrency crimes and related bankruptcies. Called the “heist of the century,” in the 2016 Bitfinex hack, 119,754 bitcoins were illegally transferred from over 2,000 Bitfinex accounts to an external wallet. Starting in January 2017, about 25,118 of those bitcoins were transferred to other exchanges. Several money laundering techniques were employed; however, the perpetrators made mistakes and were arrested in 2022. They were identified through analyzing the bitcoin blockchain, geolocating the IP addresses used for communications, and identifying individuals when bitcoin was used for “real world” transactions. The bitcoin blockchain is publicly available and would be a great resource for Big Data, data analytics, and forensics classes. JEL Classifications: K42.

ANALYSIS OF FOREIGN EXPERIENCE IN ENSURING THE STABILITY OF THE NATIONAL CURRENCY

This article examines the essence of ensuring the stability of the national currency in world practice both at the present stage and in the context of the historical development of foreign exchange markets. It is noted that the main criterion for the stability of the national currency is the ratio of the money supply and GDP of the country, which determines the totality of implemented currency, monetary and other policies in the financial sector of the country. The article describes the development of the problems of the formation of a stable ruble and the introduction of its various forms, including the digital ruble.

Understanding the implications of successive waves of currency devaluation and associated government reforms for real estate market

ABSTRACT In response to economic hurdles, several countries turn to devaluing their national currencies as a way to cope with economic difficulties. Such acts have a variety of effects on many industries, including real estate, which has led to multiple institutional and regulatory reformations aiming at minimising these effects. This paper uses a system thinking methodology that emphasises underpinning relationships among all entangled components to examine how such reforms affect minimising risks associated with currency devaluation on the real estate market. This paper uses this methodology beyond linear cause-effect analyses to consider interactions and interconnectedness in order to give some insights to gain: The impact of the currency devaluation on the real estate market based on Egyptian recent situation. The unintended consequences of government reforms on real estate market variables Solution leverage points where to intervene in the system. Holistic understanding which enables decision makers to see a wider picture and factors. Egypt has faced severe fluctuations in the economic climate, which has entailed a sharp devaluation of the currency three times between 2016 and 2023 (which could be considered a special aggressive case study between countries due to repetitiveness and effects). The effects of this devaluation have extended to all sectors, and the most important of these effects was severe challenges that faced the real estate market performance. The Real Estate market (REM) recently in Egypt has faced huge recession of transactions of the market. This research focuses on understanding the relations of reforms of the regulations which is designed to give a comprehensive overview of the government reforms of RE business, and how it has been interacting with the ramifications of those currency devaluation impacts.

Navigating the Halal Frontier: The Legality of Cryptocurrency in Islamic Finance

The popularity of virtual currencies has expanded dramatically in recent years. Seminars and conferences have been held to discuss the nature and feasibility of cryptocurrencies. Some argue that having a replacement for the current fiat currency system is a good idea since it does not need a bank account, tax payments, or audits, as cryptocurrencies do. Others argue that any means of payment other than the commonly recognised ones, such as cash, checks, DD, and so on, would allow for tax and audit evasion, which would have a huge detrimental impact on the government budget and the economy. The convergence of cryptocurrencies and Islamic finance has caused much controversy among the Muslim community about whether cryptocurrency transactions are permissible (halal) or prohibited (haram). This study investigates Islamic finance concepts as well as the technological and economic elements of cryptocurrencies in order to assess their conformity with Sharia law. It was found that cryptocurrencies are not Halal in Islam because they lack inherent value and are susceptible to additional regulatory oversight.