Decrypting New Age International Capital Flows

Clemens Graf von Luckner (), Carmen Reinhart and Kenneth Rogoff
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Clemens Graf von Luckner: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique
Carmen Reinhart: Harvard University
Kenneth Rogoff: Department of Economics, Harvard University - Harvard University

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Abstract: This paper employs high frequency transactions data on the world's two oldest and most extensive centralized peer-to-peer Bitcoin markets, enabling trade in the currencies of more than 160 countries. We develop an algorithm that allows us, with high probability, to detect "crypto vehicle transactions" in which crypto currency is used to move capital across borders, and/or to exchange one fiat currency for another. The data suggest that the use of Bitcoin has become an increasingly important channel to receive remittances and evade capital controls in emerging markets. Two event studies on Venezuela and Argentina provide supporting evidence.

Keywords: cryptocurrencies; bitcoin; international capital flows; transactions; speculative bubbles (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-fdg, nep-ifn, nep-mon, nep-opm and nep-pay
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-04603357
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Published in Journal of Monetary Economics, 2023, 138, pp.104-122. ⟨10.1016/j.jmoneco.2023.05.015⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04603357

DOI: 10.1016/j.jmoneco.2023.05.015

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