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The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and...
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The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Currencies".

Deadline for manuscript submissions: 20 June 2025 | Viewed by 32906

Special Issue Editors

Prof. Dr. Ramona Rupeika-Apoga

E-Mail Website
Guest Editor
Faculty of Business, Management and Economics, University of Latvia, LV-1586 Riga, Latvia
Interests: FinTech; alternative financing; international finance; banking
Special Issues, Collections and Topics in MDPI journals
Dr. Cristian Tiu

E-Mail Website
Guest Editor
School of Management, University at Buffalo, Buffalo, NY 14260-4000, USA
Interests: empirical and theoretical investments; determinants of performance and asset allocation of nonstandard investors
Dr. Ole Jakob Bergfjord

E-Mail Website
Guest Editor
Department of Business Administration, Western Norway University of Applied Sciences, 5020 Bergen, Norway
Interests: political risk; risk management; alternative financial markets

Special Issue Information

Dear Colleagues,

This Special Issue addresses the broad topic of future money and includes novel research on Central Bank-issued Digital Currencies (CBDCs) and private-sector-issued digital currencies (virtual currencies). CBDCs and virtual currencies represent a significant step forward in financial technology. They solve the problems associated with cash and make payment systems more efficient and cost-effective. However, they are fraught with technological issues, as digital currency can be hacked, which can erode privacy.

One hundred countries are conducting research and testing on CBDCs, and a few are already distributing CBDCs to the general public. Bahamian Sand Dollars have been in circulation since 2020. Sweden's Riksbank has created a proof of concept and is investigating the technology and policy implications of CBDCs. In China, e-CNY continues to grow, with over one hundred million individual users and billions of yuan in transactions. Furthermore, the Federal Reserve acknowledges that a CBDCs could fundamentally alter the structure of the US financial system.

Cryptocurrencies were created with the intention of revolutionizing financial infrastructure. However, as with any revolution, there are trade-offs. Due to high investor losses resulting from scams, hacks and bugs, cryptocurrencies have earned a reputation as risky investments. While the underlying cryptography is generally secure, the technical complexity of using and storing crypto assets can pose significant risk to new users. Different types of digital currencies also carry different types of political risk related to taxation and legislation.

Digital money is still in its early stages and, despite its difficulties, will play a crucial role in the future of finance.

Prof. Dr. Ramona Rupeika-Apoga
Dr. Cristian Tiu
Dr. Ole Jakob Bergfjord
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • digital currency
  • virtual currency
  • Central Bank Digital Currencies (CBDCs)
  • cryptocurrencies
  • stablecoins
  • blockchain
  • fiat currency
  • open virtual currency
  • closed virtual currency
  • initial coin offering
  • digital wallets
  • custody costs

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Published Papers (7 papers)

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Research

22 pages, 21631 KiB  
Article
Beyond the Buzz: A Measured Look at Bitcoin’s Viability as Money
by Essa Hamad Al-Mansouri, Ahmet Faruk Aysan and Ruslan Nagayev
J. Risk Financial Manag. 2025, 18(1), 39; https://doi.org/10.3390/jrfm18010039 - 17 Jan 2025
Viewed by 663
Abstract
This paper examines Bitcoin’s viability as money through the lens of its risk profile, with a particular focus on its store of value function. We employ a suite of wavelet techniques, including Wavelet Transform (WT), Wavelet Transform Coherence (WTC), Multiple Wavelet Coherence (MWC), [...] Read more.
This paper examines Bitcoin’s viability as money through the lens of its risk profile, with a particular focus on its store of value function. We employ a suite of wavelet techniques, including Wavelet Transform (WT), Wavelet Transform Coherence (WTC), Multiple Wavelet Coherence (MWC), and Partial Wavelet Coherence (PWC), to decompose the risk structure of Bitcoin and analyze its relationship with various systematic risk factors. Our dataset spans from 13 August 2015 to 29 June 2024, and includes Bitcoin, major commodities, global and US equities, Shari’ah-compliant equities, Ethereum, and the Secured Overnight Financing Rate (SOFR). We find that Bitcoin’s risk profile is increasingly aligned with traditional financial assets, indicating growing market integration. While Bitcoin exhibits high volatility, a significant portion of this volatility can be attributed to systematic rather than idiosyncratic factors. This suggests that Bitcoin’s risk may be more diversifiable than previously thought. Our findings have important implications for monetary policy and financial regulation, challenging the notion that Bitcoin’s volatility precludes its use as money and suggesting that regulatory approaches should consider Bitcoin’s evolving risk characteristics and increasing integration with broader financial markets. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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31 pages, 1616 KiB  
Article
Conceptualizing an Institutional Framework to Mitigate Crypto-Assets’ Operational Risk
by Deepankar Roy, Ashutosh Dubey and Daitri Tiwary
J. Risk Financial Manag. 2024, 17(12), 550; https://doi.org/10.3390/jrfm17120550 - 9 Dec 2024
Viewed by 1791
Abstract
Extent ecosystems of crypto financial assets (crypto-assets) lack parity and coherence across the globe. This asymmetry is further heightened with a knowledge gap in operational risk management, wherein the global landscape of crypto-assets is characterized by unprecedented external risks and internal vulnerabilities. In [...] Read more.
Extent ecosystems of crypto financial assets (crypto-assets) lack parity and coherence across the globe. This asymmetry is further heightened with a knowledge gap in operational risk management, wherein the global landscape of crypto-assets is characterized by unprecedented external risks and internal vulnerabilities. In this study, we present a critical examination and comprehensive analysis of current crypto-asset operational guidelines across geographies. We benchmark these guidelines to the Basel Committee for Banking Supervision (BCBS) risk classification framework for crypto-assets, identifying gaps in the operations across organizations. We, hence, conceptualize a novel institutional framework which may help in understanding and mitigating the gaps in operational risks’ regulation of crypto-assets. Our proposed Crypto-asset Operational Risk Management (CORM) framework determines how operational risk associated with crypto-assets of financial institutions can be mitigated to respond to the increasing demand for crypto-assets, cross border payments, electronic money, and cryptocurrencies, across countries. Applicable to firms irrespective of their size and scale of operations, CORM aligns with global regulatory initiatives, facilitating compliance and fostering trust among stakeholders. Strengthening our argument of CORM’s applicability, we present its efficacy in the form of alternate hypothetical outcomes in two distinct real-life cases wherein crypto-asset exchanges succumbed to either external risks, such as hacking, or internal vulnerabilities. It paves the way for future regulatory response with a structured approach to addressing the unique operational risks associated with crypto-assets. The framework advocates for collaborative efforts among industry stakeholders, ensuring its adaptability to the rapidly evolving crypto landscape. It further contributes to the establishment of a more resilient and regulated financial ecosystem, inclusive of crypto-assets. By implementing CORM, institutions can navigate the complexities of crypto-assets while safeguarding their interests and promoting sustainable growth in the digital asset market. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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27 pages, 1370 KiB  
Article
The Cryptocurrencies in Emerging Markets: Enhancing Financial Inclusion and Economic Empowerment
by Mohammad El Hajj and Imad Farran
J. Risk Financial Manag. 2024, 17(10), 467; https://doi.org/10.3390/jrfm17100467 - 17 Oct 2024
Cited by 1 | Viewed by 7378
Abstract
The present study discusses how adopting cryptos affects financial inclusion in developing economies. Primary constructs like financial inclusion (FI), perceived economic empowerment (PEE), trust in financial institutions (TFI), user satisfaction (US), and cryptocurrency adoption (CA) were tested through Structural Equation Modeling (SEM). The [...] Read more.
The present study discusses how adopting cryptos affects financial inclusion in developing economies. Primary constructs like financial inclusion (FI), perceived economic empowerment (PEE), trust in financial institutions (TFI), user satisfaction (US), and cryptocurrency adoption (CA) were tested through Structural Equation Modeling (SEM). The results indicated that CA significantly and positively influenced FI, US, TFI, and PEE. These relationships extend to the interaction effects: US, TFI, and PEE, all positively related to FI. This is a reflection of cryptocurrencies as an opportunity to redress most of the afflictions characteristic of traditional finance systems and to promote financial inclusion and economic empowerment in developing countries. Future research should also investigate whether digital literacy and regulatory environments support cryptocurrency access. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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23 pages, 1401 KiB  
Article
Does Previous Experience with the Unified Payments Interface (UPI) Affect the Usage of Central Bank Digital Currency (CBDC)?
by Munish Gupta, Sanjay Taneja, Vikas Sharma, Amandeep Singh, Ramona Rupeika-Apoga and Kshitiz Jangir
J. Risk Financial Manag. 2023, 16(6), 286; https://doi.org/10.3390/jrfm16060286 - 25 May 2023
Cited by 56 | Viewed by 7160
Abstract
In this study, we examined the influence of users’ experiences with the unified payments interface (UPI) system on the usage behavior of central bank digital currency (CBDC) in India. Our research developed a novel conceptual framework that investigated the relationships between technology, cognitive [...] Read more.
In this study, we examined the influence of users’ experiences with the unified payments interface (UPI) system on the usage behavior of central bank digital currency (CBDC) in India. Our research developed a novel conceptual framework that investigated the relationships between technology, cognitive factors, and behavioral intentions towards CBDC use. The framework integrated UPI usage experience as a moderator within existing models of behavioral intentions and use behaviors. We collected data through a survey conducted in major Indian cities during the pilot launch of CBDC. By utilizing a partial least squares structural equation model (PLS-SEM), we analyzed the proposed model and the relationships between the constructs. Our findings revealed the significant impact of hedonic motivation and performance expectancy on users’ behavioral intentions towards CBDC. Social influence also played a significant role in CBDC usage. Furthermore, we identified that prior UPI usage negatively moderated the relationship between performance expectancy and behavioral intention, as well as the relationship between social influence and use behavior. However, prior UPI usage did not significantly moderate the relationships between perceived risk, hedonic motivation, behavioral intention, and use behavior. These findings contribute to our understanding of the factors influencing CBDC adoption and usage behavior in India. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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12 pages, 514 KiB  
Article
The Link between Bitcoin Price Changes and the Exchange Rates in European Countries with Non-Euro Currencies
by Bogdan Andrei Dumitrescu, Carmen Obreja, Ionel Leonida, Dănuț Georgian Mihai and Ludovic Cosmin Trifu
J. Risk Financial Manag. 2023, 16(4), 232; https://doi.org/10.3390/jrfm16040232 - 6 Apr 2023
Cited by 2 | Viewed by 3979
Abstract
This paper contributes to the literature dedicated to the interlinkages between cryptocurrencies and currencies by investigating whether Bitcoin price movements affect the exchange rates of a sample of nine European countries with non-euro currencies. By resorting to the novel unconditional quantile regression, we [...] Read more.
This paper contributes to the literature dedicated to the interlinkages between cryptocurrencies and currencies by investigating whether Bitcoin price movements affect the exchange rates of a sample of nine European countries with non-euro currencies. By resorting to the novel unconditional quantile regression, we show that there is a statistically significant link between Bitcoin price movements and changes in nominal exchange rates. In normal market conditions, an increase in the price of Bitcoin can be associated with an appreciation of the currencies from our sample, while during the COVID-19 pandemic, the relationship inversed. In addition, we find heterogeneities in this relationship, depending on the level of change in the nominal exchange rate. The results emphasize the relevance of Bitcoin price movements to the conduct of monetary policy through the exchange rate channel and that investors in cryptocurrencies and various financial assets denominated in the currencies from our sample can benefit from diversification by including both types of assets in their portfolios. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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16 pages, 1210 KiB  
Article
Demystifying the Effect of the News (Shocks) on Crypto Market Volatility
by Mukul Bhatnagar, Sanjay Taneja and Ramona Rupeika-Apoga
J. Risk Financial Manag. 2023, 16(2), 136; https://doi.org/10.3390/jrfm16020136 - 17 Feb 2023
Cited by 57 | Viewed by 7595
Abstract
The cryptocurrency market has enormous growth potential. In this study, the aim is to investigate how the news (shocks) affects cryptocurrency market volatility. This is significant because, while cryptocurrencies are gaining popularity among investors, the market’s extreme volatility discourages some prospective buyers, while [...] Read more.
The cryptocurrency market has enormous growth potential. In this study, the aim is to investigate how the news (shocks) affects cryptocurrency market volatility. This is significant because, while cryptocurrencies are gaining popularity among investors, the market’s extreme volatility discourages some prospective buyers, while also causing large losses for inexperienced investors. From 8 March 2019 to 30 November 2022, data from Bitcoin, Binance Coin, Ethereum, Dogecoin, and XRP were collected for the current study. The E-GARCH model was applied to the framed dataset to achieve the research aim. We discovered that the value of the size factor for all currencies was statistically significant, indicating that the news (shocks) significantly impacts volatility. Furthermore, volatility persistence in all cryptocurrencies is found to be very high and statistically significant. These study findings can help investors understand the impact of the news (shocks) on volatility in cryptocurrency returns. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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17 pages, 836 KiB  
Article
Risk Spillovers between Bitcoin and ASEAN+6 Stock Markets before and after COVID-19 Outbreak: A Comparative Analysis with Gold
by Parichat Sinlapates, Tanit Sriwong and Surachai Chancharat
J. Risk Financial Manag. 2023, 16(2), 103; https://doi.org/10.3390/jrfm16020103 - 8 Feb 2023
Cited by 5 | Viewed by 2701
Abstract
This paper applies the multivariate GARCH models to investigate the role of Bitcoin as a hedge and safe haven for ASEAN+6 stock markets compared to gold. We used daily data for the dates 2 January 2017–20 January 2023, covering the recent COVID-19 pandemic. [...] Read more.
This paper applies the multivariate GARCH models to investigate the role of Bitcoin as a hedge and safe haven for ASEAN+6 stock markets compared to gold. We used daily data for the dates 2 January 2017–20 January 2023, covering the recent COVID-19 pandemic. The empirical findings provide compelling evidence of cross-market shock and volatility transmission between stock returns and Bitcoin returns in both directions. Therefore, the dynamics of Bitcoin returns significantly influence the volatility of stock returns, and the relationship also holds in reverse. All diagonal element estimations are statistically significant for both periods, as shown by the findings of the return and volatility spillovers between the returns of gold and the ASEAN+6 stock market. For most ASEAN+6 equity markets evaluated, Bitcoin and gold are not safe havens, and their inclusion increases the portfolio downside risk. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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