Journal of Financial Market Infrastructures

Manmohan Singh
International Monetary Fund

This fourth (autumn/fall) issue of Volume 11 of The Journal of Financial Market Infrastructures offers three papers and underscores the journal’s commitment to embracing the role of new technologies (including digital money) and the changes in global payments systems, among other topics. For readers who missed our winter, spring or summer issues, The Journal of Financial Market Infrastructures has a new editorial team, comprising myself as editor-in-chief alongside deputy editors Jorge Cruz from the University of Western Ontario and Anneke Kosse from the Bank for International Settlements.

This issue includes one Forum paper (primarily reviewed by the editorial team) as a thought piece to encourage analytical research, and two analytical research papers(refereed via the standard review process by at least two independent referees).

The Forum paper, “The fundamental role of the repo market and central clearing”,is by Cristina Di Luigi, Antonio Perrella and Alessio Ruggieri, all from the Bank of Italy. The authors review the structure of government bond repo markets and analyze the main factors that have influenced eurozone repo market dynamics over the past decade. They also discuss the role of traditional and new client clearing models inlight of the current policy debate, arguing that greater use of these models may lead to greater market efficiency and resilience.

“On par: a money view of stablecoins” by Iñaki Aldasoro, Perry Mehrling and Daniel H. Neilson, the issue’s first analytical paper, gives a “money view” on stablecoins. The authors highlight the analogy of Eurodollars (offshore private dollar deposits) with stablecoins (on-chain private dollar deposits), and they reveal the primitive character of the existing on-chain liquidity mechanism that supports stablecoins’ promise of par settlement: liquidity, not solvency, is the issue confronted by par settlement.

Our second research paper focuses on tax evasion. “Can tax evasion be reduced by fostering cashless payments? A systematic literature review” by Giulia Spinelli, Luca Gastaldi, Leo Van Hove and Ellen Van Droogenbroeck reviews the literature on the impact of payment methods on tax evasion. Spinelli find that cash facilitates tax evasion, while card payments help to improve value added tax (VAT) compliance. Their review of the literature highlights the need for further research on the impact of digital wallets and central bank digital currencies.

The Journal of Financial Market Infrastructures continues to provide its readership >with a selection of cutting-edge papers, novel ideas and analytics that underpin research, particularly 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.

We encourage regular submissions and we note that opportunities are available for selected papers to be presented at conferences or seminars for the dissemination of key messages. Papers that appeared in the last three issues have, for example, been presented at a recent 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.

Jorge, Anneke and I very much hope you will enjoy reading the papers in this issue, and we would welcome suggestions for topics that would be of particular interest to our readers as the landscape of financial market infrastructures continues to change rapidly.