Journal of Financial Market Infrastructures

Ronald Heijmans
De Nederlandsche Bank

Matti Hellqvist
Bank of Finland

Tatu Laine
Bank of Finland

Payment systems and financial market infrastructures (FMIs) are core components of the monetary and financial system and are central to the effective implementation of central bank mandates. As providers and overseers of critical infrastructures, central banks have a direct interest in how technological innovation affects the safety, efficiency, resilience and inclusiveness of payment systems. Recent advances – ranging from artificial intelligence (AI) and instant payment technologies to private digital payment instruments and evolving market structures – are reshaping the payments landscape at an accelerating pace. These developments offer clear benefits, but they also introduce new risks and policy challenges that require careful analysis and forward-looking governance.

Applied research and data-driven studies play an important role in central bank work, as they support and strengthen policy-making and oversight. The growing availability of data and the need to make effective use of it, the emergence of new analytical approaches that challenge traditional structures, and the increasing speed of change – which requires stronger foresight and more advanced risk management – all highlight the importance of such research.

The Seminar on Financial Market Infrastructures (formerly known as the BoF Simulator Seminar), hosted yearly by the Bank of Finland, has become an established forum for this research and for dialogue between practitioners and researchers. The theme of the 23rd Simulator Seminar in 2025 was “Harnessing Emerging Technologies for Financial Market Infrastructures”. This special issue of The Journal of Financial Market Infrastructures includes four innovative papers presented at the seminar as well as a paper based on a keynote address. These papers contribute to the understanding of how innovation influences the functioning of payment systems and FMIs, with a particular focus on issues relevant to central banks and other public authorities. Together, they examine how new technologies and market practices affect operational resilience, liquidity needs, competition and risk transmission, and how policy frameworks can adapt to these changes while safeguarding financial stability and public trust.

The issue opens with a Forum paper, “Responsible use of artificial intelligence in financial market infrastructures” by Jorge Cruz Lopez, which addresses the growing use of AI in the operation and oversight of FMIs. As AI applications expand into areas such as operational monitoring, fraud prevention, risk management and policy implementation, their deployment in systemically important infrastructures raises heightened concerns relating to transparency, accountability and governance. From a central bank perspective, these concerns are particularly salient given FMIs’ public good characteristics and their role in maintaining financial stability. Cruz Lopez develops a framework for responsible AI adoption based on the explainability, data stewardship, governance and ethics (EDGE) principles, arguing that responsible design is a precondition for supervisory effectiveness, legitimacy and long-term sustainability.

The issue’s first research paper, “An econometric investigation on the stability of stablecoins: are these coins stable or is their stability just a flip of the coin?” by Lala AlAsadi, Oluwasegun Bewaji, Aayush Gugnani, Tarush Gupta and Ronald Heijmans, focuses on the stability implications of US-dollar-backed stablecoins. Using a comprehensive econometric framework, the authors’ analysis reveals significant heterogeneity across stablecoins’ responses to macrofinancial shocks and market stress: some stablecoins exhibit resilience, while others display heightened sensitivity and stronger interconnectedness with broader financial markets during crises. These findings challenge simplified notions of stablecoin stability and are directly relevant for central banks assessing potential spillovers to payment systems, monetary transmission and financial stability.

In the second research paper in the issue, “Instant payments as the new normal: how much more money do the banks need?”, Matti Hellqvist and Kasperi Korpinen examine settlement liquidity needs in the context of the transition toward instant retail payments. As real-time payment systems proliferate, understanding their implications for intraday liquidity management is becoming increasingly important for both market participants and central banks. Using artificial data calibrated on Finnish payment flows, this paper quantifies the additional liquidity needs at the system level and presents a model to forecast bank-level impacts. The authors show that while aggregate liquidity needs may increase only modestly, liquidity demand can vary substantially across banks and settlement days. This highlights the importance of liquidity buffers and operational preparedness. Their results on bank-level liquidity needs are invariant to the topology of the payment network when there is sufficient liquidity, and thus their results can be applied to any bank of similar size and with similar payment flow operating in different market setups.

In “The merchant’s hand in the consumer’s choice of payment instruments: an agent-based model”, our third research paper, Philip Bergmann, Anne Weber and Niklas Ego analyze retail payment behavior using an agent-based model of the German payment economy, calibrated with detailed sociodemographic and payment behavior data. The paper’s results demonstrate that relatively small changes in merchant payment acceptance can generate large shifts in consumer payment choices. From a policy perspective, these findings provide valuable insights into how acceptance policies, infrastructure availability and behavioral factors interact, informing debates on digitalization, financial inclusion and continued access to cash.

The issue’s final paper, “Locked out by loyalty: entry deterrence through rebates in payment card markets” by Vera Lubbersen, examines competition and market structure in card payment networks, focusing on the strategic use of rebates and switching costs by the dominant networks. Lubbersen’s analysis shows how these mechanisms can deter entry and reinforce market concentration, even in the absence of explicit regulatory barriers. For central banks and payment regulators, these findings are relevant in assessing competition, efficiency and resilience in retail payment markets, as well as in designing policies that promote a diverse and open payments ecosystem.

Taken together, the papers in this collection highlight that innovation in payments and FMIs presents central banks with both opportunities and challenges. While new technologies can enhance efficiency and service provision, they also require careful oversight and robust governance frameworks to ensure that core public policy objectives – financial stability, resilience, inclusiveness, and trust in money and payment systems – are upheld. This special issue underscores the need for analytical tools and policy approaches that keep pace with innovation while remaining firmly anchored in central bank mandates.

We express our sincere thanks to Thomas Paine, the journal’s managing editor, and the editorial team of The Journal of Financial Market Infrastructures for their guidance, support and efficiency throughout the preparation of this special issue.