Hyperfunding Regulating Financial Innovations

Innovations in corporate finance are driven by frustrations with present regulations and fueled by the internet and social media. Hyperfunding is one such example: Tesla paved the way for an electric vehicle revolution by preselling hundreds of thousands of its Model 3 EV direct to consumers. Unwary consumers may not have realized that they were underwriting Tesla’s bold strategy to transform multiple product markets. Risks were not disclosed. Rewards proved illusory. Investors would have been entitled to disclosures and colorable claims of fraud when Tesla missed milestones and deadlines. But consumers can only get their $1000 deposit back, without interest, if Tesla has the financial and reputational capital to refund consumers. What happens when an undercapitalized or fraudulent firm uses the same technique and fails to deliver? Are cryptocurrency promoters and “initial coin offerings” already Hyperfunding, pumping, and dumping vaporware? This Article explores challenges with regulating novel techniques in corporate finance and discusses an initial framework for protecting investors while promoting innovation

The Ontological Sociology of Cryptocurrency: A Theoretical Exploration of Bitcoin

For millennia, money has been a basal element of everyday life reality in market-organized societies. Albeit money has changed extrinsically (e.g., form, use, utility) countless of times, some intrinsic characteristics remain the same, i.e., money is reified value. But why? What gives money value? Even more crucial, what is money in the first place? This exploratory study delves into the intricacies of money, in particular the revolutionary 21st century pecuniary techno-phenomenon, a cryptocurrency called Bitcoin. Though cryptocurrencies have been the topic of several financial and legal scholarly publications for a few years, we rather focus our analysis on Bitcoin\u27s ontological characteristics under a schema of overlapping theoretical layers: Social Exchange Theory, Marxian Dialectics, and Social Construction of Reality. Our intention is to dissect Bitcoin sociologically and empirically examine its global exchange, consumption, and institutionalization. Consequently, we venture to ask, can Bitcoin redefine the meaning of money and how we relate to it? Reformulate the role of banking? Disrupt the universally accepted objective reality of currency value attached to sensorial experience? Transfer trust from ambivalent human relations to an incorruptible algorithm? Or even become the Internet of money

Fintech and the Innovation Trilemma

Whether in response to roboadvising, artificial intelligence, or crypto-currencies like Bitcoin, regulators around the world have made it a top policy priority to supervise the exponential growth of financial technology (or fintech ) in the post-Crisis era. However, applying traditional regulatory strategies to new technological ecosystems has proven conceptually difficult. Part of the challenge lies in the tradeoffs involved in regulating innovations that could conceivably both help and hurt consumers and market participants alike. Problems also arise from the common assumption that today\u27s fintech is a mere continuation of the story of innovation that has shaped finance for centuries. This Article provides a novel theoretical framework for understanding and regulating fintech by showing how the supervision of financial innovation is invariably bound by what can be described as a policy Trilemma. Specifically, we argue that when seeking to provide clear rules, maintain market integrity, and encourage financial innovation, regulators have long been able to achieve, at best, two out of the three goals. Moreover, today\u27s innovations exacerbate the tradeoffs historically embodied in the Trilemma by either reconfiguring or disintermediating traditional financing operations and the discrete services supporting them, thereby introducing unprecedented uncertainty as to their risks and benefits. This Article thus proceeds to catalogue the strategies taken by regulatory authorities to navigate the Trilemma, and posits them as operating across a spectrum of interrelated responses. It then proposes supplemental administrative tools to support not only market, but also regulatory data gathering and experimentation

Blockchain and Distributed Autonomous Community Ecosystems: Opportunities to Democratize Finance and Delivery of Transport, Housing, Urban Greening and Community Infrastructure

This report investigates and develops specifications for using blockchain and distributed organizations to enable decentralized delivery and finance of urban infrastructure. The project explores use cases, including: providing urban greening, street or transit infrastructure; services for street beautification, cleaning and weed or graffiti abatement; potential ways of resource allocation ADU; permitting and land allocation; and homeless housing. It establishes a general process flow for this blockchain architecture, which involves: 1) the creation of blocks (transactions); 2) sending these blocks to nodes (users) on the network for an action (mining) and then validation that that action has taken place; and 3) then adding the block to the blockchain. These processes involve the potential for creating new economic value for cities and neighborhoods through proof-of-work, which can be issued through a token (possibly a graphic non-fungible token), certificate, or possible financial reward. We find that encouraging trading of assets at the local level can enable the creation of value that could be translated into sustainable “mining actions” that could eventually provide the economic backstop and basis for new local investment mechanisms or currencies (e.g., local cryptocurrency). These processes also provide an innovative local, distributed funding mechanism for transportation, housing and other civic infrastructure

Blockchain, business and the fourth industrial revolution:Whence, whither, wherefore and how?

Blockchain is one the most remarkable technological innovations of the 21st century. The most notable application of blockchain is in the development and operation of cryptocurrencies (e.g. bitcoin, ethereum, among others). Besides the financial services industry, blockchain is also considered in other sectors such as international trade, taxation, supply chain management, business operations and governance. However, blockchain has not been examined comprehensively in all areas of relevant literature. This article conducts a survey of the literature to gain an understanding of the opportunities and issues presented by blockchain in various business functions. The article begins by providing a discussion regarding how the blockchain technology operates. The paper takes a broad focus in its analysis of the prospects of blockchain for various business functions, including banking and the capital markets, corporate governance, international trade, and taxation. The paper demonstrates how organisations and regulators can leverage blockchain to upscale business operations, enhance efficiency and reduce operational costs. The key drawbacks of blockchain that stakeholders need to bear in mind before adopting the technology are also highlighted. The article also reflects on how organisations can tap into blockchain to reap the full potential of the fourth industrial revolution

Blockchain in Service Management and Service Research – Developing a Research Agenda and Managerial Implications

As blockchain technology is maturing to be confidently used in practice, its applications are becoming evident and, correspondingly, more blockchain research is being published, also extending to more domains than before. To date, scientific research in the field has predominantly focused on subject areas such as finance, computer science, and engineering, while the area of service management has largely neglected this topic. Therefore, we invited a group of renowned scholars from different academic fields to share their views on emerging topics regarding blockchain in service management and service research. Their individual commentaries and conceptual contributions refer to different theoretical and domain perspectives, including managerial implications for service companies as well as forward-looking suggestions for further research.Information and Communication TechnologyEconomics of Technology and Innovatio

Meta-Mortgaging: Islamic Law Review on Marhūn Issues

To this date, technology has seen massive development and, it influences the economic field. The emergence of the metaverse has become an inevitable part of this progress. It serves as a digital world, wherein everyone is able carry out a vast array of activities, including economic transactions. The emergence of digital assets, that has encouraged serious discussion, is inseparable from Islamic law. One of these digital assets is the Non-Fungible Token (NFT). This digital asset is the focus of this study, specifically on for its posibility to become material guarantees. This article employs a qualitative study and presented descriptively through the perspective of Islamic law. The result of this study is that the pledged-object (marhūn) has certain primary conditions for it to be functional, namely: it is a property, it has value, it can be traded, its asset value is clearly known, and it is actually owned by the guarantor (rāhin). The concept of marhūn as a valuable object ultimately answers that NFT is included in the marhūn category. However, since NFTs do not stand alone if the transaction currency used in the metaverse is cryptocurrencies, al-rahn transactions using NFTs become less favourable considering Cyrptocurrency is deemed to be haram

The non-consensus of the “metaverse” economy

This paper attempts to clarify the main economic logic of the metaverse from an economic methodology, showing that the virtual digital economic activities of the metaverse cannot be separated from the real economy, exploring the boundary between the metaverse and the real world, and suggesting that the metaverse essentially needs to be constructed by relying on the real social structure and economic logic, and that there is no consensus with its completely decentralized concept. The increase in the realistic match or realisation of the metaverse is the result of long-term social evolution, and decentralisation is not a sufficient necessary condition for the development of the metaverse, which should be based on the central bank’s digital RMB to build a metaverse financial infrastructure. This paper also discusses the current status and development path of technology applications and industrial investments for realising the metaverse. In the primary stage of the metaverse economy, infrastructure hardware and software and underlying technologies and their related applications will be prioritised for development; games and business service experience applications have more room for development, while social and other content applications are subject to personal information protection and ideological constraints and will be steadily and orderly promoted