Technology innovation in financial markets: Implications for money, payments and settlement finality

The three essays collected in this PhD thesis discuss the implications of technology innovation for settlement finality, cross-border payments and money. The first essay investigates the topic of settlement finality in the context of Proof-of-Work (PoW) blockchains, exemplified by Bitcoin. This is of particular importance as final settlement plays a crucial role in removing settlement risk between counterparties in support of financial stability. The second essay explores whether and how technological innovation, in conjunction with policy measures, can improve the process of correspondent banking cross-border payments and develops a set of potential design scenarios for the future of this business. The third essay offers an alternative perspective on the future role of central bank money as a retail use digital complement to physical cash. The paper develops the rationale for a Eurosystem issued ‘Digital Euro’ and proceeds by delivering a blueprint for the design of such a solution.