We use a spatial competition based model in a two-stage game setup to assess whether equilibrium in exchange rates among the leading currencies is attainable. We show that a stable equilibrium can be reached in the case of two leading currencies, but not in the case of three. In our model, central banks of leading currencies attract, through the workings of their objective and policy, small cur...

To examine whether the recent price patterns and transaction costs of Bitcoin represent a general characteristic of decentralized virtual currencies, we analyze virtual currencies in online games that have been voluntarily managed by individuals since 1990s. We find that matured game currencies have price stability similar to that of small size equities or gold, and their transaction costs are ...

Crypto Currencies have recently gained enormous popularity amongst the general public. With each passing day, more and more companies are radically accepting crypto currencies in their payment systems, paving way for an economic revolution. Currently more than 700 crypto-currencies are available at Coindesk alone for trade purposes. As of November 2016, the Crypto currencies hold a total market...

This paper traces the rise of virtual currencies and surveys their more popular incarnations, such Liberty Reserve and Bitcoin. Using cash and conventional electronic payment networks (e.g. Visa and PayPal) as a reference point, we delineate the evolution of financial abuses in the face of virtual currencies. In particular, we describe the properties of virtual currencies that make them suscept...

By analyzing the foreign exchange market data of various currencies, we derive a hierarchical taxonomy of currencies constructing minimal-spanning trees. Clustered structure of the currencies and the key currency in each cluster are found. The clusters match nicely with the geographical regions of corresponding countries in the world such as Asia or East Europe, the key currencies are generally...

We investigate the structure of the currencies (systems of coins) for which the greedy change-making algorithm always finds an optimal solution (that is, a one with minimum number of coins). We present a series of necessary conditions that must be satisfied by the values of coins in such systems. We also uncover some relations between such currencies and their sub-currencies.

Evolutionary studies often assume that energy is the primary resource (i.e. "currency") at the heart of the survival-reproduction trade-off, despite recent evidence to the contrary. The evolutionary consequences of having a single trade-off currency versus multiple competing currencies are unknown. Using simulations, we modeled the evolution of either a single physiological currency between rep...

Bitcoin and other similar digital currencies on blockchains are not ideal means for payment, because their prices tend to go up in the long term (thus people are incentivized to hoard those currencies), and to fluctuate widely in the short term (thus people would want to avoid risks of losing values). The reason why those blockchain currencies based on proof of work are unstable may be found in...

We consider an international financial market model that consists of N currencies. The purpose is to derive a no arbitrage condition which is not affected by the choice of numéraire between the N currencies. As a result, we show that a finiteness condition for an arbitrary chosen currency and the no arbitrage condition for the basket currency are necessary and sufficient for the no arbitrage pr...

This paper studies crash risk of currencies for funding‐constrained speculators in an attempt to shed new light on the major currency puzzles. Our starting point is the currency carry trade, which consists of selling low interest rate currencies—“funding currencies”—and investing in high interest rate currencies—“investment currencies.” While the uncovered interest rate parity (UIP) hypothesize...