Global Money Research Articles

Anonymity Unmasked The Role of Cryptocurrencies in Global Money Laundering

This research paper examines the intersection of cryptocurrencies and financial crime, particularly focusing on money laundering. It examines how these digital assets are employed in illicit financial activities, investigates the methodologies used to obscure transaction trails, evaluates regulatory responses to these risks, and presents practical case studies highlighting the real-world criminal use of cryptocurrency. The study, covering data from 2020 to 2024, combines a thorough review of existing literature with empirical analysis of blockchain transactions and case studies. The novelty of this study is the use of blockchain analysis methods for monitoring cryptocurrency transactions in the blockchain and detecting criminal money laundering techniques. It also examines how the criminals use mixers to exponentially expand the transaction trail and hide the money flow. Our analysis reveals that cryptocurrencies are often viewed as tools for anonymity but the underlying technology provides tracking of transactions, albeit with challenges, particularly when advanced techniques such as coin mixers, privacy coins, and decentralized exchanges are used. Case studies, including high-profile hacks, highlight the complexities of tracing illicit funds and challenges faced by law enforcement agencies. Despite efforts by global regulatory bodies, regulations on digital assets vary significantly around the world, allowing criminals to exploit jurisdictions with lax regulations for their illicit activities. The study concludes that cryptocurrencies pose notable risks of money laundering, advancement in digital forensic tools, enhanced regulatory measures, and greater international cooperation are essential to address these risks. This research contributes to the understanding of money laundering through cryptocurrencies and underscores the need for continuous improvement of regulation and technology to ensure finance remains safe in the age of innovation.

Монетарна ентропія в умовах економічної глобалізації

Introduction. Changes occurring in the nature of money in the context of globalization have long been of interest to economists. Instead, the events of recent years have shown that such changes can also be caused by profound transformations that are natural ones and subject to general physical laws. Problem Statement. Establishing the dependence of the further development of money as an economic category on the action of the second law of thermodynamics. The purpose is the analysis of scientific ideas at the junction of economics and physics (ecophysics) and their spread to the monetary sphere ,in particular considering the manifestation of monetary entropy in the process of the international monetary system. Methods. General scientific and special methods are used: analysis, synthesis, description, comparison, theoretical generalization and abstract-logical analyses. Results. This publication introduces the concept of monetary entropy as a state of chaoticization of the essence of money (entropy of money) and the monetary system as a whole. The development of monetary entropy is considered as the result of cyclical development according to the Hegelian model “thesis-antithesis-synthesis”, which allows to avoid complete chaosization of the monetary sphere due to its transition to a new level of the spiral of development. The current state of the development of money as an economic category and the international monetary system as a whole, caused by the impact of the globalization process on them, proves that they are at the stage of another transition from entropy to negentropy, which can lead to the emergence of Global Money. Conclusions. Turning to the issue of predicting the future of money, it should be noted that there is an opinion that soon money will simply become a relic of the past and disappear altogether, leaving the probable technological singularity as one of its consequences, the very liquidation (more precisely, the senselessness of existence ) of money as an economic category. One of the possibilities of the technological singularity is the emergence of a post-scarcity society in which there will be a surplus of resources and the needs of every member of society will be fully satisfied (a variant of capitalist communism, when even an unconditional basic income will appear to be an unacceptable minimum for satisfying needs, because the principle from each according to his abilities to each according to his needs will be implemented. However, the change will not happen overnight, so there will most likely be a transition period during which humanity will still use money and the concept of money will evolve rather than disappear completely.

Infrastructural power, institutional karma, and existential choices

AbstractLeon Wansleben’s new book, The Rise of Central Banks: State Power in Financial Capitalism, tells an intricately complex story of the world’s most influential central banks successfully harnessing the forces of financial globalization to build their institutional power as the principal managers of their national economies. The book argues that, regardless of central banks’ rationales and rationalizations, the resulting expansion of global money markets has failed to generate the intended macroeconomic and societal benefits. Instead, as became evident in the post-2008 era, the world’s most powerful central banks are now structurally dependent on the increasingly self-referential markets for financial assets. While the book’s narrative is focused on inflation targeting and other monetary policy innovations since the 1970s, it raises much broader questions and invites further reflection on the nonlinear dynamics of power in today’s financial markets and the uncertain future of central banks.

Depoliticizing money: how the International Monetary Fund transformed central banking

Abstract After the 2008 Global Financial Crisis, the politics of money and central banking came to the forefront. Calls for repoliticizing central banking towards social goals such as inequality, poverty, and climate change have gathered much traction. Economists and political scientists have called for revisiting the long-lost developmental mandates of central banks and for understanding them as social institutions and as terrains of overlapping contestations. Yet, the role of law in framing the discourse on money and monetary policy has been less explored. In this paper, I argue that international law, especially the International Monetary Fund (IMF/Fund), played a crucial role in the depoliticization of money in the 1970s and 1980s. Legal instruments of the Fund, including conditionality and surveillance, were operationalized to transpose ‘price stability’ and ‘central bank independence’ into the legal mandate of central banks worldwide. From a distinctly political enterprise, central banking became ‘technocratic’ endeavour operating strictly under the paradigm of rationality and neutrality. If, as this paper shows, the law has played a crucial role in depoliticizing money, the law can also be a tool in reorienting central banking towards progressive ends such as tackling poverty or inequality. This would require a careful re-evaluation of the legal institutions of global money, beginning with the Fund itself.

ЕФЕКТИВНІСТЬ КРИПТОВАЛЮТ ЯК ЗАСОБУ МІЖНАРОДНИХ ПЛАТЕЖІВ: АНАЛІЗ ВАРТОСТІ, ШВИДКОСТІ ТА БЕЗПЕКИ ТРАНЗАКЦІЙ

This article focuses on the effectiveness of using cryptocurrencies as a means for international payments, with an emphasis on the analysis of cost, speed, and security of transactions. The aim of the study is to explore the potential of blockchain technologies to optimize international financial operations. This research considers the performance of cryptocurrencies in international payments, focusing on an analysis of cost, speed, and security of transactions, utilizing data from various sources and case studies. Blockchain technologiessuch as Ripple and Solana demonstrate high throughput, capable of processing up to 65,000 transactions per second (TPS).In comparison, traditional banking systems offer significantly lower processing speeds, withBitcoin handling around 7 TPS and Ethereum up to 15 TPS. The anticipated Ethereum 2.0 network upgrade projects an increase to 100,000 TPS, significantly enhancing their potential in international payments. Traditional banking transactions can incur fees of up to $50 USD, whereas blockchain networks can reduce costs to less than $0.01 per transaction. The implementation of distributed ledger technology could save up to $27 billion by 2030 on international transactions. According to research, the average cost of an international remittance is 6.4% of a $200 transaction, indicating the potential for significantsavingsthrough the adoption of cryptocurrencies. Cryptocurrency payments are protected using cryptographic methods and decentralization, reducing the risks of fraud and attacks. By adhering to "privacy by default" principles, transaction confidentiality can be further enhanced, including generating new addresses for each transaction. Regular security audits and multi-factor authentication provide an additional layer of protection. It can be asserted that blockchain technology offers significant advantages in speed, cost, and security of transactions, which could radically transform the landscape of international trade and financial transfers. The practical significance of the research lies in identifying the potential of cryptocurrencies as a reliable, cost-effective, and secure tool for international payments, which may alter the global money transfer system.

Impact of global liquidity on Indian financial markets and monetary policy outcomes: An ARDL approach

Liquidity management is essential for the financial framework of any economy, especially for operationalizing monetary policy. The relatively resilient Indian financial system experiences the transmission of global liquidity shocks, which results in a reversal of portfolio flows from domestic markets resulting in central bank interventions. This paper examines the impact of global liquidity shocks on key financial and monetary variables of the Indian economy using quarterly data for the period 2000–2018 using an autoregressive distributed lags framework. We find the presence of long-run relationships between global liquidity variables (such as the US treasury bill rate, CBOE-VIX index, and US broad monetary aggregate) and the Indian financial markets (NSE Nifty index) and the monetary policy outcome (91-day Treasury bill rate). In the short run, the results were significant for the impact of the risk aversion measure on domestic policy rate in line with the expectations channel. The exchange rate channel and global money supply also significantly impacted the Indian policy rate. The results have significant policy implications as they indicate the most optimal transmission channels through which global liquidity affects the Indian economy.

DeFi, Blockchain and Cryptocurrencies: Proposing a Global Money Matrix for the Blockchain Era

Unlike early civilizations with an entire economy built around agriculture and the practicality of the barter system, today's complex economies require immediate, low-cost transactions. The digitalization of transactions is helping economies develop through various new assets and currencies. The appearance of DeFi, CBDC’s, and many blockchain based systems has created a bit of a debate among researchers. Consequently, the matter maintains a certain ambiguity, which requires more research. In this paper, we will be discussing how blockchain is revolutionizing the financial sector, by creating decentralized finance and central banks’ digital currencies. We will then propose a new global money matrix starting with a short literature review of existing definitions and categorizations since there still is a lack of understanding and standardization of currency categories, especially digital currencies. Then we will do the same for CBDC by categorizing it by component: participants, categories, and application scenarios.

The cross-border interconnectedness of shadow banking

Shadow banking has shown a consistent growth in global financial markets, raising concerns about its cross-border interconnectedness and the potential transmission of financial shocks. Previous financial crises have highlighted the risks associated with interconnectedness, underscoring the need for a comprehensive analysis of shadow banks’ international linkages. Using a global vector autoregressive model and data from twelve countries for 2000–2020, this study examines the international interconnectedness of shadow banking. The empirical findings demonstrate that shadow banking is internationally interconnected and that these interconnections are statistically associated with funding conditions in the global money and capital markets. Specifically, cross-border statistical associations exist between shadow bank assets, short- and long-term interest rates, and equity prices in many countries, as well as with the US risk premium and term spread. Hence, shadow banks are significantly exposed to cross-border shocks and can potentially transmit and propagate these shocks.

Global Money Supply and Energy and Non-Energy Commodity Prices: A MS-TV-VAR Approach

Global Money Supply and Energy and Non-Energy Commodity Prices: A MS-TV-VAR Approach

Viral Governance: How Unilateral U.S. Sanctions Changed the Rules of Financial Capitalism

This article presents how global governance went viral as its targets moved from sovereign to corporate entities and its source from multilateral financial institutions to domestic U.S. institutions. It argues that viral governance describes how the United States rewrote global rules through its sanctions program first against Iran, then against Iran-affiliated global banks and businesses, and finally against the daily compliance practices of global money, information, and technology flows in general. Utilizing over 150 interviews with international experts in the field of sanctions and banking, the article describes the recursive process that led the U.S. government to assume global regulatory powers and to initiate deglobalization in its trade war against the European Union and China. The article concludes that viral governance perpetuates crises, whereas multilateral governance seeks to extinguish crises; it operates through sustained legal uncertainty over the jurisdictional limits of the hegemonic power, while multilateral governance seeks to absorb legal uncertainty; it requires the abolition of all regulatory counterpowers, whereas multilateral governance can allow strong states to assume the equality of sovereign powers.

Monetary Policies and European Office Markets Dynamics

The purpose of this paper is to study the consequences of unconventional monetary policies on Europe’s commercial real estate market. To investigate the role of money supply on real estate markets dynamics, we use panel modelling. Our main objective is to analyze the relationships between office price indexes and monetary variables. Our panel analysis focuses on price dynamics across 16 main office markets in Europe between 2009 and 2019. We have constructed for each market a monetary index suitable for commercial real estate. Our robust results, corrected for the presence of errors-in-variables, report that a positive relationship exists between the global money supply and office prices. Moreover, the largest markets seem more affected by the massive injections of liquidity from the central banks, especially those from the European Central Bank (ECB). We highlight significant differences among office markets in Europe.

ДЕСТАФАЦІЯ ГРОШЕЙ ТА ПОЯВА ЦИФРОВОЇ ВАЛЮТИ

Банківська справа завжди вирізнялася використанням нових комунікаційних технологій, тому не дивно, що електронні засоби передачі інформації також стали активно використовуватися банками, що привело до появи перших форм електронних грошей, які виникли в результаті застосування таких грошових приладів, як термінали для банківських кредитних карток і системи комп’ютерного зв’язку банків з клієнтами. Утім, з точки зору теорії грошей електронні гроші – це ті самі кредитні, або фіатні, гроші, тільки не в паперовій формі, а у вигляді запису на електронних носіях інформації. Однак після 1980-х років процес зникнення матеріальної форми грошей, або дестафація, набув ще більш інтенсивних темпів і, пройшовши декілька етапів, досягнув моменту появи цифрової валюти, яка є адекватною формою грошей нової цифрової економіки. Сучасні криптовалюти, засновані на технології блокчейну, по суті, являють собою електронне поєднання «складської розписки» та «перевідного векселя» і виступають у якості можливої основи нових глобальних грошей.На особливу увагу заслуговують останні етапи цього процесу, а саме розвиток криптовалют і цифрової валюти центральних банків, які відображають конкурентну боротьбу між державними емісійними інститутами і новими акторами глобальної фінансової системи. У результаті аналізу можна зробити висновок, що процес дестафації грошей наблизився до свого логічного завершення – дереїфікації самих грошей як економічної категорії, адже «штучний інтелект» може дозволити перетворити гроші на абсолютно нематеріальну, тобто ідеальну, форму, що і приведе до збігу їх форми і сутності.

The Ecor As Global Money: Towards a Green Bretton Woods System to Finance Sustainable and Just Transformation

The Ecor As Global Money: Towards a Green Bretton Woods System to Finance Sustainable and Just Transformation

Мировая экономика: идеальный шторм

The article shows that economic sanctions that have been tested for a long period of time as an instrument to demonstrate the dominance of the dollar-centered world economic system, with the beginning of the Ukrainian crisis finally took shape as a new regulatory institution of global political and economic rules. The reasons led to negative shocks in global economic and financial system have been analyzed. It is demonstrated that underestimation of influence on short-term and long-term conditions of global equilibrium of the isolation of a large national economy (Russia), which has an oligopoly in a number of world commodity markets, causes a chain reaction of distortion of commodity stocks balance and fragmentation of the world commodity market itself. It is suggested that an abstract concern over defragmentation of the seemingly unshakable global monetary financial architecture started generating not yet very clear, but getting increasingly more specific and spatially diverse block frameworks, leading in the medium term to regionalization of global monetary financial system as far as settlement of payments and debt financial market are concerned, and to reformatting of the entire system of global finance and money, including the function of measure of value, in the long term. The article discusses the impact of the forced restrictions in global rules and guarantees for functioning of global market and global money as the institution to serve it, blocked access to this system for individual national economies on short-term and long-term modifications of conditions and mechanisms of performance of global economic financial system

The international currency system revisited

What does the international currency system really look like? Since World War II, the US dollar has prevailed as the international community’s one truly global money. The currency system could loosely be described as unipolar, practically a monopoly. Is that still true? Opinions are sharply divided. Close to a decade ago the authors sought to resolve the issue with a detailed empirical analysis stretching back over a quarter of a century. Their conclusion was that loose talk of an increasingly multipolar currency system was at best premature. In reality, they could find few signs of significant change in the competitive structure of the system over the years under review. While acknowledging that a future of multipolarity could yet arrive, they saw no evidence that anything like that had happened yet. The aim of this paper is to extend the authors’ previous analysis forward to encompass another decade. Their conclusion, overall, remains much the same as before. Despite some hints of minor erosion, the dollar remains as dominant as ever. A cluster of smaller currencies have begun to compete for attention, but multipolarity in any meaningful sense has still not arrived. The greenback still reigns supreme.

НОВІТНІ ТЕНДЕНЦІЇ УКРАЇНСЬКОГО ПЛАТІЖНОГО РИНКУ

The current state and current trends of the payment market of Ukraine are presented. At the beginning of 2022, 53 payment systems and settlement systems were operating. Conducted studies of the activity of the NBU electronic payment system testify to increasing the effectiveness of its activities for 2019–2021. $13,042.1 million was transferred within Ukraine through money transfer systems. US equivalent; to Ukraine – 505.3 million dollars US equivalent; from Ukraine – 16.8 million dollars US equivalent. The leader in the amount of transfers within Ukraine were the money transfer systems "NovaPay" and "Postal Transfer". The first place in terms of the volume of transfers both to and from Ukraine is occupied by the Western Union system. The number of payment cards issued by Ukrainian banks has a growing trend. As of the beginning of 2022, the number of cards issued by Ukrainian banks amounted to 89.1 million cards, which is 21.3% more than at the beginning of the previous year. The coronavirus pandemic in 2020 and the war in 2022 led to the transition to contactless payments, increasing the use of electronic wallets. It was found that almost 60% of active payment cards are contactless and tokenized cards. The largest number of payment cards is issued in the international payment system MasterCard. The second and third places are occupied by the international payment system VISA and NPS "SPACE". The largest share of the market of electronic wallets for paying for goods and services within the country is occupied by: EasyPay, SharPay (mobile application of Vodafone operator), Smart-money (mobile application of Kyivstar operator) and Global Money, they have one drawback in common – you can pay for goods and services only within the country, and for international payments in Ukraine, you can use AdvCash, Perfect Money, Payeer. Non-cash transactions made by cardholders in 2021 accounted for 70% and cash transactions for 30%, while in 2012 non-cash transactions made up 17% and cash transactions for 83%. Today, cashless payments are trending, which are increasingly displacing cash from circulation. The NBU has implemented a number of measures to improve regulation of the payment market. New legislative trends create conditions for the further development of payment products, services and services.

Normalising money growth is reducing inflation risks

▪ Global money supply growth is starting to normalise, lessening the threat of high inflation. Upside risks to money growth remain, but timely action to rein in QE and modest rate hikes should be enough to keep inflation under control, in our view, and prevent a shift to a higher inflation ‘regime’. ▪ Money growth has slowed from a peak of 25% y/y to around 8% y/y in advanced economies, but the rate is still higher than the average of the past decade. In emerging economies (EM), money growth has already returned to normal levels. ▪ Our estimates of ‘excess’ money growth show it to be higher than is consistent with inflation targets in most advanced economies, especially the US. In EM, money growth looks excessive in Turkey and Nigeria but seems consistent with below‐target inflation in Russia, China, India, and South Africa. ▪ The main contributor to fast money growth in the advanced economies remains quantitative easing (QE) by central banks. Our forecasts suggest QE will remain a major contributor in the next few quarters before tailing off by late 2022. ▪ As QE fades, private credit will be the key driver of monetary growth. Our global indicator shows banks loosening credit standards at the fastest pace in a decade. Credit standards are still tightening in EM, but there's no sign yet of a post‐Evergrande financing crunch in China. ▪ Central bank surveys show signs of a revival in credit demand, although this recovery is patchy across economies and credit segments. Actual credit flows to the private sector are also picking up. But recent strength is concentrated in areas away from corporate lending, where loan growth remains negative or subdued in the US and Europe.

Проблемы и перспективы развития НИО.2 в рамках шестого технологического уклада

The paper analyzes the process of the natural transition of the world economy from the fifth technological paradigm to the sixth one in the 2020s. It is shown that, by analogy with the periods of transition from the fourth technological paradigm to the fifth one in the 1970s, and from the third technological paradigm to the fourth one in the 1920s, the expected decline in economic activity, which has already manifested itself in the global economic crisis of the 2020s-2021s, is observed in the 2020s. It is noted that the traditional decline in economic activity in the extractive and processing industries, which takes place in the transition phase, is currently aggravated by the imminent global financial crisis, which is a consequence of a large-scale separation of the global money supply from the global commodity supply. And the resolution of this crisis is a matter of the near future (the next few years). It has been found that it is a huge surplus of unsecured financial resources (a global financial “bubble”) that makes a significant contribution to the slowdown of the processes of accelerating industrial technological development in the sixth technological paradigm by refocusing investors’ attention on speculative operations with cryptocurrencies and intangible assets, where the baton of the dot-com bubble has now been picked up by the set of information technologies under the banner of Industry 4.0, which was widely publicized, but never demonstrated its revolutionary economic efficiency. It has been shown that despite the fact that advanced global industrial technologies are a priority target for Western sanctions, the Russian economy continues to focus on the extractive industries developed in the framework of previous technological paradigms, the dominance of which in the national economy actually guarantees the technological backwardness of the country. Conditions have been formulated under which the prospects for the development of NIS.2 within the framework of the sixth technological paradigm in the Russian economy will be high.

Проблемы и перспективы развития НИО.2 в рамках шестого технологического уклада

The paper analyzes the process of the natural transition of the world economy from the fifth technological paradigm to the sixth one in the 2020s. It is shown that, by analogy with the periods of transition from the fourth technological paradigm to the fifth one in the 1970s, and from the third technological paradigm to the fourth one in the 1920s, the expected decline in economic activity, which has already manifested itself in the global economic crisis of the 2020s-2021s, is observed in the 2020s. It is noted that the traditional decline in economic activity in the extractive and processing industries, which takes place in the transition phase, is currently aggravated by the imminent global financial crisis, which is a consequence of a large-scale separation of the global money supply from the global commodity supply. And the resolution of this crisis is a matter of the near future (the next few years). It has been found that it is a huge surplus of unsecured financial resources (a global financial “bubble”) that makes a significant contribution to the slowdown of the processes of accelerating industrial technological development in the sixth technological paradigm by refocusing investors’ attention on speculative operations with cryptocurrencies and intangible assets, where the baton of the dot-com bubble has now been picked up by the set of information technologies under the banner of Industry 4.0, which was widely publicized, but never demonstrated its revolutionary economic efficiency. It has been shown that despite the fact that advanced global industrial technologies are a priority target for Western sanctions, the Russian economy continues to focus on the extractive industries developed in the framework of previous technological paradigms, the dominance of which in the national economy actually guarantees the technological backwardness of the country. Conditions have been formulated under which the prospects for the development of NIS.2 within the framework of the sixth technological paradigm in the Russian economy will be high

Monetary policy regimes: A global assessment

AbstractAn eight‐region, stochastic, general equilibrium model that incorporates global money and financial markets is used, first, to identify the distributions of regional supply side shocks in 1954–2016 from real GDP data. Second, in Monte Carlo simulations, the model is subjected to random draws from these distributions in all regions simultaneously, under a range of combinations of monetary targets. These experiments begin with a comparison of the volatilities of output and welfare (defined as the purchasing power of disposable income at regional prices) under current de facto and de jure monetary targets. The results show that the de facto targets offer significant improvement. A further analysis of targeting games suggests that a Nash equilibrium on output risk is dominated by nominal GDP targeting, while the corresponding Nash equilibrium on welfare risk has predominant inflation targeting (IT). Notwithstanding IMF policy to convert developing country central banks to inflation targeting, a fallacy of composition is observed in the spread of IT internationally. This spread tends to raise the volatility of welfare in the established open economies.