cover image: Decrypting New Age International Capital Flows (English)

20.500.12592/0wfp4k

Decrypting New Age International Capital Flows (English)

5 Oct 2021

This paper employs high frequency transactions data on the world's oldest and most extensive centralized peer-to-peer Bitcoin market, which enables trade in the currencies of more than 135 countries. It presents an algorithm that allows, with high probability, the detection of “crypto vehicle transactions” in which crypto currency is used to move capital across borders or facilitate domestic transactions. In contrast to previous work which has used “on-chain” data, this paper's approach enables one to investigate parts of the vastly larger pool of “off-chain” transactions. Finding that, as a conservative lower bound, over 7 percent of the 45 million trades on the exchange we explore represent crypto vehicle transactions in which Bitcoin is used to make payments in fiat currency. Roughly 20 percent of these represent international capital flight/flows/remittances. Although this work cannot be used to put a price on cryptocurrencies, it provides the first systematic quantitative evidence that the transactional use of cryptocurrencies constitutes a fundamental component of their value, at least under the current regulatory regime.
terms of trade trade volume capital control new zealand dollar application programming interface law enforcement agencies probability density function extremely high frequency medium of exchange type 1 error overseas development institute means of payment 0 hypothesis global capital flow short period of time subject to regulation list of countries barrier to entry flow of fund international capital flow changes in capital finance research store of value present evidence degree of confidence exchange rate regime south african rand netherlands antillean guilder rise and fall share of trade east caribbean dollar hong kong dollar cross border flow type 2 error probability distribution function sri lanka rupee costa rican colon cfa franc beac financial regulatory framework colombian peso international capital movement trinidad and tobago dollar distribution of trade new taiwan dollar saint helena pound papua new guinea kina cfa franc bceao cayman islands dollar transmission of fund

Authors

Graf Von Luckner,Clemens Mathis Henrik, Reinhart,Carmen M., Rogoff,Kenneth S.

Disclosure Date
2021/10/05
Disclosure Status
Disclosed
Doc Name
Decrypting New Age International Capital Flows
Originating Unit
Off of Sr VP Dev Econ/Chief Econ (DECVP)
Published in
United States of America
Series Name
Policy Research working paper; no. WPS 9794;
Total Volume(s)
1
Unit Owning
Off of Sr VP Dev Econ/Chief Econ (DECVP)
Version Type
Final
Volume No
1

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