Digital assets : pricing, allocation and regulation / edited by Reena Aggarwal [and three others].

Format:

Book

Contributor:

Aggarwal, Reena, editor.

Language:

English

Subjects (All):

Cryptocurrencies.

Digital currency.

Valuation.

Physical Description:

1 online resource (xii, 298 pages) : digital, PDF file(s).

Edition:

First edition.

Place of Publication:

Cambridge, United Kingdom ; New York, NY : Cambridge University Press, 2024.

Summary:

The ecosystem of digital assets continues to change exponentially. In post-COVID times, digital assets may be seen as a cheaper, more liquid, and transparent safe haven compared to that offered by more traditional asset types. Inclusion of new digital assets, especially cryptocurrencies, in portfolios of standard financial assets has been the subject of some academic study, but the theoretical and practical implications of this new trend are not yet fully understood. Digital Assets is the first book to present a comprehensive review of studies on the valuation and pricing of cryptocurrencies and digital assets. Outlining a new research agenda aimed at understanding the fundamental drivers of the value of cryptocurrencies, it brings together an impressive line-up of academics and practitioners to provide a timely perspective on government responses and regulatory approaches towards digital assets, including the setting of new legal frameworks.

Contents:

Cover

Half-title page

Series page

Title page

Copyright page

Contents

Editorial Board Members

Acknowledgements

Part I Institutionalisation of Digital Assets

1 Institutionalisation of Digital Assets

1.1 Introduction

1.2 Current State of Institutionalisation of Digital Assets

Bitcoin Futures Contracts on Chicago Mercantile Exchange

Bitcoin Exchange Traded Funds and Trusts

Hedge Funds and Venture Capital

Other Indicators of Institutionalisation

1.3 The Future of Institutionalisation of Digital Assets

Valuation, Volatility, and Correlation

Regulatory Uncertainty

Custody and Prime Brokerage of Digital Assets

Tokenisation of Assets

Central Banks Digital Currencies

1.4 Conclusion

Bibliography

2 How and When Are Cryptocurrency Predictable? Backtesting Their Portfolio Economic Value

2.1 Introduction

2.2 Data

2.3 Methodology

2.4 Are Cryptocurrency Returns Predictable?

2.5 The Economic Value of Cryptocurrencies for a Mean-Variance Investor

2.6 Conclusion

3 DeFi versus Trad FiValuation Using Multiples and Discounted Cash Flows

3.1 Introduction

3.2 Literature

3.3 Methodology

Data

Fundamental Analysis

Comparable Analysis

3.4 Results

Fundamental Analysis: Historical Balance Sheets

Fundamental Analysis: DCF Estimation

3.5 Conclusion

Part II Digital Assets and Decentralised Finance

4 The Suitability of Securities Token Offerings, Cryptocurrencies, and Crypto-Related Assets for Pension Investments

4.1 Crypto Investing for Pension Funds and Participants

4.2 Defined Benefit Pension Funds

South Korea

United States

Canada

Germany

4.3 Individual Pension Funds - Defined Contribution Plans

Australia

New Zealand

Finland

Switzerland

United Kingdom

Canada.

United States

4.4 Countries Where Crypto Investing in PensionsIs Not Permitted

4.5 Should Pension Participants Investin Crypto-related Assets?

4.6 The Psychology of Cryptocurrency Investing

Crypto and Fraud

4.7 Conclusions

5 Regulatory Considerations of the Decentralised Financial System

5.1 Expansion of DeFi Ecosystem

5.2 Regulatory Considerations by the Category of Financial System

5.3 Regulatory Considerations on Centralised Aspects of DeFi Managed by DAOs

Admin Keys

Governance Token Holders

Collateral

Aggregator

5.4 The Future of DeFi: Further Decentralisation?

5.5 Regulatory Challenges in the Highly Decentralised Financial System

5.6 Implementation of Multi-stakeholder Approach through BGIN

6 A Hayekian View of Digital Currencies

6.1 Introduction

6.2 Taxonomy of Digital Money

Literature Review

A Politico-economic Model

6.3 Ideologies, Business Models, and Sovereignties

Trustless

Trusted

Stablecoin Issuers

Corporations

Central Banks

6.4 Possible Futures

Public-Private Partnership

Geopolitical Competition

A Decentralised Future

6.5 From CeFi to DeFi

Lending

Insurance

Exchange

6.6 Conclusion

Part III Regulations and Compliance of Digital Assets

7 Call for a Global Crypto-assets Regulatory Framework: Lessons from the US, Europe, and the UK

7.1 Introduction

7.2 US Security Regulation for Crypto-assets

The SEC

Is Crypto-asset a Security?

ICO

The DAO

The Ripple Case

The CFTC

What Future for the US Crypto-assets Security Regulation?

7.3 The European Security Laws for Crypto-assets

EBA Report

MiCA

Will Europe Set the Standards for Crypto-assets Regulation?

7.4 UK Crypto-assets Regulation

UK Crypto-assets Taskforce

What Next?.

The UK Towards a Consensus Crypto-assets Regulation

7.5 Conclusion

8 UK Anti-money Laundering Regulation of Crypto-assets

8.1 Introduction

8.2 UK AML Regime

Legislation

MLRs 2017

POCA 2002 and TACT 2000

Guidance

FCA

JMLSG

FATF

8.3 Know Your Customer (KYC)

Customer Due Diligence (CDD)

KYC is Key

Identity Verification

Risk-based Approach

FATF Travel Rule

Identification of VASPs

Data Transmission

Regulatory Harmony

8.4 Privacy Enhancement

Privacy Coins

Mixers

Decentralised Finance (DeFi)

8.5 Conclusion

9 Triple-Entry Accounting, Blockchain, and Next of Kin: Towards a Standardisation of Ledger Terminology

9.1 Introduction

9.2 Methodology

9.3 Results

Conceptualisation of TEA in Whitepapers

Preliminary Concepts: Decentralisation, Distribution, Accounting, and DLT

The Distinction Between the Centralised, the Decentralised, and the Distributed

The Difference Between Book-keeping and Accounting

An Accounting Typology for Blockchain-inspired Technology

The Concept of Triple-entry Accounting

Three-dimensional Accounting

Triple-entry Accounting: A Concept

TEA - Operational Criteria

Near-essential Features

Architectural Add-ons

Other Features

Glossary Table

Other Double-entry Accounting Iterations

Immutable Double-entry Accounting (IDEA)

Plain Text Accounting (PTA)

9.4 Conclusion

9.5 Acknowledgements

Part IV Cryptocurrency Economics and Monetary Policies

10 Monetary Policy in a World with Cryptocurrencies, Stablecoins, and Central Banks Digital Currency (CBDC)

10.1 Monetary Policy Implementation

10.2 New Forms of Money

10.3 Stablecoins

10.4 Retail CBDC

10.5 Crypto Currencies

10.6 Conclusion

11 Yields: The Galapagos Syndrome of Cryptofinance.

11.1 Introduction: Decentralised Finance Needs Yield

11.2 Protocol Defined Return and Ethereum 2.0

11.3 Automated Market Maker and Yield

Introduction to AMMs

The Financial Mechanics of AMMs

Challenges of AMMs

11.4 Over-Collateralised Cryptoloans

What are Cryptoloans?

Pricing and Modelling of Cryptoloans

Liquidation of Cryptoloans

11.5 Efficient Use of Collateral to Enable Leverage and Enhance Yield

11.6 Short-dated Cryptoloans on Decentralised Finances

11.7 The Basis of Perpetual and Finite Duration Futures

The Basis of Perpetual Futures

Premium Rate=((Mark Price−Deribit Index)/Deribit Index)×100%

The Basis of Finite Duration Futures

11.8 Crypto-Options Market and Yield

11.9 Conclusion: Challenges of DeFi are Tied to Yield

12 The 'Klair Effect': A New Monetary Framework on Controlling Inflation Using CBDC

12.1 Introduction

12.2 What are CBDCs

12.3 Monetary Challenges and the Need for CBDCs

Confidence in Central Banks

Efficiency in Transmitting Value

Effective Cross-Border Payments System

12.4 How Do Central Banks Issue Money

12.5 Central Bank Transactions: Controlling and Managing Money Supply

Open-Market Operations

Foreign Exchange Transactions

Discount Loans

12.6 'Klair Effect': A New Paradigm for Quantitative Tightening

Basics of Quantitative Easing and Quantitative Tightening

Goal of Quantitative Tightening

Effects of Inflation

12.7 Klair Effect: How Is It Used

Purchasing CBDCs in the Economy (Households and Corporations) and Deleting this Money

12.8 Klair Effect: How Will It Work?

12.9 CBDC Deletion: Foreign Exchange Reserves - CBDC Float

12.10 CBDC Deletion: CBDC Re-created in Times of Need

12.11 Conclusion

12.12 Annex 1: How Does Quantitative Easing Work

List of Abbreviations

Index.

Notes:

Title from publisher's bibliographic system (viewed on 07 Mar 2025).

Includes bibliographical references and index.

ISBN:

9781009362320

1009362321

9781009362337

100936233X

9781009362290

1009362291

OCLC:

1514636695