Publications et documents de travail
01/01/21
- ouvrages
    Thierry Bonneau
Petit bréviaire de la transition numérique, Revue de droit bancaire et financier, Repère 1
Résumé à venir
01/01/21
- ouvrages
    Thierry Bonneau
Le « Digital Finance Package », Revue de droit bancaire et financier, Etude
Résumé à venir
01/01/21
- documents de travail
    Bertrand Crettez and Marie Obidzinski
The Choice of Titling System in Land and the Blockchain
Registering land title is costly and time-consuming. This is a common picture all over the world. In France, the cost of a real estate transaction accounts approximately for 7.3 % of the property value and it takes on average 42 days to achieve it, according to the World Bank (2019). In Germany, the respective numbers are 6.6 % of the property value and 52 days. There are differences between countries due to many factors: regulations, taxes, insurance costs, and real estate agency fees. The paper focuses on transaction costs, leaving aside insurance costs and taxes. In this regard, the Blockchain is a candidate to replace or complement traditional land registration systems. The Blockchain, a particular type of distributed ledger technology (DLT), is a secure, transparent information storage and transmission technology which has numerous advantages, in terms of cost, duration and production of immutable information. The reduction of transaction costs through the diminishing role of trust intermediaries is a key proposition of the proponents of the blockchain. Yet, the Blockchain encounters numerous limits, both technical and legal, that might explain why the applications of this technology to real estates are scant. In the paper, we view the Blockchain as a cost-saver mechanism albeit one that can potentially be jeopardized by hacking. We look at the desirability of keeping traditional registration, in a context where blockchain registration is available. In our setup, there is a priori an infinite set of land titling systems, each characterized by its quality (namely, the probability for a given land that there is no forfeiture) and the unit transaction cost. We define an optimal land titling system as one that maximizes the aggregate expected value of land net of transaction costs (the expected value of a land is computed by taking into account the probability of forfeiture). Choosing a more secure land titling system increases the expected values of land but comes at a cost that can deter people to register their properties. Thus, there is a trade-off between security and the number of registered transactions. We find that under reasonable assumptions, resorting to the blockchain is optimal. Yet, it is never socially optimal to replace the traditional public registration by the Blockchain. This does not mean, however, that the traditional public registration system must not be adapted. We indeed show that the optimal quality of protection provided by traditional registration must be either sufficiently high (and higher than that of the blockchain), or low enough (and lower than that of the blockchain). To understand the thrust of this result, consider an economy where land values are often large. Introducing the Blockchain benefits owner of lands whose values are relatively low because it decreases the probability of forfeiture at a cost lower than that of the traditional land registration system. But since the owners of these lands are few and the values of the latter are low, using the Blockchain results in the mild increase in the aggregate social welfare. For the owners of lands whose values are large, it is better to use a high-quality traditional land system rather than the Blockchain. That is because, the increase in the expected value of lands with this system is higher than that obtained with the Blockchain, and still more than compensates the rise in the unit cost.
01/01/21
- documents de travail
    Bertrand Crettez and Lisa Morhaim
General Equilibrium Cryptocurrency Pricing
This paper contributes to a burgeoning literature devoted to the macroeconomics of cryptocurrency. We study the valorization of cryptocurrency in an overlapping generations model where people have the choice between cryptocurrency and central bank currency. This setup is one of the few workhorse models used to address monetary issues, where money can have a positive value in equilibrium. Specifically, we pay attention to three features of cryptocurrency: it is a risky asset (because of frauds and hacks), which one acquires by bearing transaction costs, and its supply reaches its upper limit in a finite time (e.g., Bitcoin). We consider both the standard case with linear-quadratic preferences and the more general case where preferences are not specified. We find that the effect of an increase in cryptocurrency on the currency prices notably depends on the transaction costs borne by people who buy cryptocurrency. In particular, when these costs are given by a concave function (that is, when there are economies of scale in holding cryptocurrency), it can be the case that an increase in cryptocurrency results in an increase in its price and a decrease in the central bank currency price. Moreover, we find that both the prices of central bank currency and cryptocurrency decrease with a mean-preserving increase in the risk of the latter. These results have two implications. Firstly, the fact that an increase in cryptocurrency may increase its price clashes with the fact that its supply is limited. There is then a tension between the principle that cryptocurrency is in limited supply and the fact that increasing its stock would not decrease its value. Secondly, the fact that the equilibrium price of central bank currency is linked to the risk of hacking of cryptocurrency underlines the fact that the existence of the latter can jeopardize the value of the former, even when a sound monetary policy is followed by the central bank.
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