Related papers: Bank Deposits as {\em Money Quanta}
A digital currency is money in a digital form. In this model, maintaining integrity of the supply is a core concern, therefore protections against double-spending are often at the heart of a secure digital money scheme. Quantum money…
Quantum money represents an innovative approach to currency by encoding economic value within the quantum states of physical systems, utilizing the principles of quantum mechanics to enhance security, integrity, and transferability. This…
Quantum theory is used to model secondary financial markets. Contrary to stochastic descriptions, the formalism emphasizes the importance of trading in determining the value of a security. All possible realizations of investors holding…
Money was invented to address the difficulty in the double coincidence of wants between the supply and demand when people exchanged their goods and services. There are two information states in society: one is the initial state that people…
We propose a field-theoretic framework that models money-debt dynamics in economic systems through a direct analogy to particle-hole creation in condensed matter physics. In this formulation, issuing credit generates a symmetric pair-money…
This paper considers the problem faced by a bank which trades in the funds market so as to maintain the reserve requirements and minimize the costs of doing that. We work in a stochastic paradigm and the reserve requirements are determined…
This paper studies an interacting particle system of interest in econophysics inspired from a model introduced in the physics literature. The original model consists of the customers of a single bank characterized by their capital, and the…
While classical money can be copied, it is impossible to copy quantum money in principle, with only the bank that issues it knowing how to generate it, meaning only the bank can make exact copies. Not all reliable banks, such as central…
The price-bubble and crash process formation is theoretically investigated in a two-asset equilibrium model. Sufficient and necessary conditions are derived for the existence of average equilibrium price dynamics of different agent-based…
In this paper we analyse financial implications of exchangeability and similar properties of finite dimensional random vectors. We show how these properties are reflected in prices of some basket options in view of the well-known put-call…
We consider the problem of governing systemic risk in an assets-liabilities dynamical model of banking system. In the model considered each bank is represented by its assets and its liabilities.The capital reserves of a bank are the…
Quantum computing has traditionally centered around the discrete variable paradigm. A new direction is the inclusion of continuous variable modes and the consideration of a hybrid continuous-discrete approach to quantum computing. In this…
Credit risk may be warehoused by choice, or because of limited hedging possibilities. Credit risk warehousing increases capital requirements and leaves open risk. Open risk must be priced in the physical measure, rather than the risk…
The properties of money commonly referenced in the economics literature were originally identified by Jevons (1876) and Menger (1892) in the late 1800s and were intended to describe physical currencies, such as commodity money, metallic…
We consider a banking network represented by a system of stochastic differential equations coupled by their drift. We assume a core-periphery structure, and that the banks in the core hold a bubbly asset. The banks in the periphery have not…
In a previous paper, we applied a field formalism to analyze capital allocation and accumulation within a microeconomic framework of investors and firms. The financial connections were modeled by a field of stakes, representing the links…
Quantum money is a cryptographic protocol in which a mint can produce a quantum state, no one else can copy the state, and anyone (with a quantum computer) can verify that the state came from the mint. We present a concrete quantum money…
Quantum theory provides a comprehensive framework for quantifying uncertainty, often applied in quantum finance to explore the stochastic nature of asset returns. This perspective likens returns to microscopic particle motion, governed by…
Quantum money allows a bank to mint quantum money states that can later be verified and cannot be forged. Usually, this requires a quantum communication infrastructure to transfer quantum states between the user and the bank. Gavinsky (CCC…
This paper provides the mathematical foundation for polynomial diffusions. They play an important role in a growing range of applications in finance, including financial market models for interest rates, credit risk, stochastic volatility,…