Journal of Financial Market Infrastructures

This fourth (fall) issue of Volume 12 of The Journal of Financial Market Infrastructures offers three papers that straddle the topics of digital money, quantum computing and liquidity in global payments systems.

The Journal of Financial Market Infrastructures strives to provide its readership with a selection of cutting-edge papers, especially “outside the box” ideas, and analytics that underpin research especially in the areas of distributed ledger technologies, machine learning and artificial intelligence and their impact on financial market infrastructures; payment, settlement and clearing systems; digital money (both private and public) and its impact on central bank operations and central bank balance sheets; tokenized deposits and stablecoins; and nonbank payment service providers and access to central bank payment rails.

The first paper in the issue, by António Portugal Duarte, Fátima Sol Murta and Simão Oliveira (all from the University of Coimbra, Portugal), is on “The crypto Wild West: a deep dive into the market volatility of junk coins versus Bitcoin”. The authors’ empirical findings suggest that in sharp contrast to the speculative nature of junk coins, Bitcoin demonstrates greater price stability, reinforcing its credibility in the crypto market.

In “Quantum-readiness for the financial system: a road map”, the issue’s second paper, Raphael Auer, Donna Dodson, Angela Dupont, Maryam Haghighi, Nicolas Margaine, Danica Marsden, Sarah McCarthy and Andras Valko provide a framework to support the financial system in the transition to quantum-safe cryptographic infrastructures. The authors highlight the urgency to start the transition today.

Finally, in our third paper, “A liquidity black hole: what is the impact of a failing participant in a large value payment system, and does time matter?”, Ronald Heijmans and Ellen van der Woerd (both at De Nederlandsche Bank) present a methodology to detect potential failing participants in large value payment systems (LVPSs) and measure the intraday impact of outages. Potential outages for large banks can be detected within 10 minutes, while for smaller banks detection may take more than 30 minutes.

We encourage regular submissions, and for selected papers we find opportunities for seminars to disseminate the key messages. Recent papers were presented at a Joint seminar by the Bank for International Settlements Innovation Hub Hong Kong Centre and The Journal of Financial Market Infrastructures, and at the International Monetary Fund. A forthcoming special issue of our journal will include papers presented at the 23rd Simulator Seminar hosted by the Bank of Finland.

We welcome suggestions for topics that would be of particular interest to our readers as the landscape of money, collateral and financial market infrastructures in a digital era continues to change rapidly.