IDEAS home Printed from https://ideas.repec.org/a/ntu/ntugeo/vol10-iss2-35-45.html

Fragmentation and Concentration within the International Payments, System – Risks, Challenges, Opportunities

Author

Listed:
  • Iulia-Monica Oehler-Șincai

    (Department of International Economic Analysis, Institute for World Economy)

  • Claudia Gabriela Baicu

    (Department of Economic Integration and Financial Markets, Institute for World Economy)

  • Sorin-Nicolae Curcă

    (Department of International Economic Analysis Institute for World Economy)

Abstract

This paper underscores the dynamic and complex context of international payments, with the aim to identify specific forces, risks and challenges behind current megatrends. It underlines also the opposite tendencies of fragmentation and concentration within the international payments system. Fragmentation is due to three main categories of factors: differences in regulation, difficulties of interoperability and lack of common standards; variety of participants, with different objectives and goals; geopolitical tensions, which may lead to the emergence of parallel payment systems, which do not interact with each other. Concentration within the international payments system is reflected by the market power of specific private actors, especially big technology companies (BigTechs), but also financial technology actors (FinTechs). This concentration is also evidenced by the overwhelming share held by the most used currencies in global payments. Our paper argues that the ideal international payments system should provide fast, cheap, safe, transparent and cyber resilient services. At the same time, financial stability, deterrence of illegal activities and the level playing field should be ensured. The qualitative analysis that is the basis of this paper takes into account multiple perspectives, including demand side, supply side and regulators.

Suggested Citation

  • Iulia-Monica Oehler-Șincai & Claudia Gabriela Baicu & Sorin-Nicolae Curcă, 2022. "Fragmentation and Concentration within the International Payments, System – Risks, Challenges, Opportunities," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 10(2), pages 35-45, December.
    • Handle: RePEc:ntu:ntugeo:vol10-iss2-35-45
    as

    Download full text from publisher

    File URL: http://www.globeco.ro/wp-content/uploads/vol/split/vol_10_no_2/geo_2022_vol10_no2_art_004.pdf
    File Function: First version, 2022
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Igor Makarov & Antoinette Schoar, 2022. "Cryptocurrencies and Decentralized Finance (DeFi)," NBER Working Papers 30006, National Bureau of Economic Research, Inc.
    2. Gambacorta, Leonardo & Khalil, Fahad & Parigi, Bruno, 2022. "Big Techs vs Banks," CEPR Discussion Papers 17649, Centre for Economic Policy Research.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Di Casola, Paola & Habib, Maurizio Michael & Tercero-Lucas, David, 2023. "Global and local drivers of Bitcoin trading vis-à-vis fiat currencies," Working Paper Series 2868, European Central Bank.
    2. Kirimhan, Destan, 2023. "Importance of anti-money laundering regulations among prosumers for a cybersecure decentralized finance," Journal of Business Research, Elsevier, vol. 157(C).
    3. Castillo León, Jaime & Lehar, Alfred, 2026. "What data have told us about decentralized finance," Journal of Corporate Finance, Elsevier, vol. 96(C).
    4. Adi Wolfson & Gerard Khaladjan & Yotam Lurie & Shlomo Mark, 2025. "The Greater Sustainability of Stablecoins Relative to Other Cryptocurrencies," JRFM, MDPI, vol. 18(3), pages 1-14, March.
    5. repec:osf:osfxxx:ube2z_v1 is not listed on IDEAS
    6. Walid Mensi & Mariya Gubareva & Hee-Un Ko & Xuan Vinh Vo & Sang Hoon Kang, 2023. "Tail spillover effects between cryptocurrencies and uncertainty in the gold, oil, and stock markets," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-27, December.
    7. Joseph Abadi, 2024. "Making Sense of Decentralized Finance," Economic Insights, Federal Reserve Bank of Philadelphia, vol. 9(1), pages 18-24, March.
    8. Meghna Jayasankar & Anoop S Kumar, 2026. "Decoding multifractality in DeFi through governance tokens," Economics Bulletin, AccessEcon, vol. 46(1), pages 93-110.
    9. Shahriari, Hesam & Stivers, Adam & Tsang, Ming, 2025. "Bias in cryptocurrency investing: The effect of financial and moral considerations," Journal of Behavioral and Experimental Finance, Elsevier, vol. 47(C).
    10. Jean Barthélemy & Paul Gardin & Benoit Nguyen, 2023. "Stablecoins and the Financing of the Real Economy," Working papers 908, Banque de France.
    11. Oefele, Nico & Baur, Dirk G. & Smales, Lee A., 2025. "The effect of currency risk on crypto asset utilization in Türkiye," Emerging Markets Review, Elsevier, vol. 65(C).
    12. José Zapata Sevilla, 2024. "Analysing decentralised autonomous organisations (DAOs): limits and perspective," Journal of Banking Regulation, Palgrave Macmillan, vol. 25(4), pages 425-436, December.
    13. Agur, Itai & Ari, Anil & Dell’Ariccia, Giovanni, 2025. "Bank competition and household privacy in a digital payment monopoly," Journal of Financial Economics, Elsevier, vol. 166(C).
    14. Yanfei Dong & Jiayin Hu & Yiping Huang & Han Qiu & Yingguang Zhang, 2025. "The use and disuse of FinTech credit: When buy-now-pay-later meets credit reporting," BIS Working Papers 1239, Bank for International Settlements.
    15. Aysan, Ahmet Faruk & Gozgor, Giray & Nanaeva, Zhamal, 2024. "Technological perspectives of Metaverse for financial service providers," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    16. Katja Neugebauer & João Almeida & João Alves & Carlos Bettencourt & Maria Bettencourt & Madalena Borges & Filipa Castilho & Sónia Correia & Gisela Fonseca & Mariana Júdice & André Leal & Afonso Marque, 2024. "Occasional paper on Decentralised Finance," Working Papers o202402, Banco de Portugal, Economics and Research Department.
    17. Francesca Carapella & Nathan Swem, 2022. "Decentralized Finance (DeFi): Transformative Potential & Associated Risks," Finance and Economics Discussion Series 2022-057, Board of Governors of the Federal Reserve System (U.S.).
    18. Bhambhwani, Siddharth M. & Huang, Allen H., 2024. "Auditing decentralized finance," The British Accounting Review, Elsevier, vol. 56(2).
    19. Di Casola, Paola & Habib, Maurizio Michael & Tercero-Lucas, David, 2025. "Global and local drivers of Bitcoin trading vis-à-vis fiat currencies," Journal of International Money and Finance, Elsevier, vol. 158(C).
    20. Bekemeier, Felix & Schär, Fabian & Schmeiser, Hato, 2026. "Decentralized Finance risk transfer and smart contract-based insurance," Journal of Banking & Finance, Elsevier, vol. 183(C).
    21. Allen, Franklin & Barbalau, Adelina, 2024. "Security design: A review," Journal of Financial Intermediation, Elsevier, vol. 60(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntu:ntugeo:vol10-iss2-35-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefan Ciucu The email address of this maintainer does not seem to be valid anymore. Please ask Stefan Ciucu to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/feuntro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.