KATHERINE FOSTER, Independent
Email: klmfoster.rn@gmail.com
SOFIE BLAKSTAD, affiliation not provided to SSRN
SANGITA GAZI, The University of Hong Kong
Email: sangita@connect.hku.hk
MARTIJN BOS, Independent
Email: martyn.bos@gmail.com

This paper - part of a series from the UN Taskforce on Global Digital Finance Governance - garners a robust understanding of the potential macroeconomic impacts and related regulatory challenges of central bank digital currencies (CBDCs) and other digital currency initiatives in developing countries. This paper begins from a point of recognition that the landscape of digital currencies, their associated taxonomy as well as related regulations are still evolving alongside their potential implications. As such, we focus on the different types of digital currencies previously in circulation, delineating these from those on the near and immediate horizon. We employ an umbrella definition to encompass CBDCs and digital ledger technology (DLT)-based currencies including stablecoins, as well as earlier versions of digital money, as subsets of digital currency to examine the evolution of macroeconomic impacts on developing countries as well as the emerging regulatory gaps. We cluster key elements and draw assumptions across common parameters in research, for the sake of consistency and to retain the focus on advancing the understanding of the broader macroeconomic impacts on least developed countries (LDCs).

We begin with the evolution of mobile money and e-money as a subset of digital currencies and their well-understood positive impact on financial inclusion. We touch briefly upon the regulatory challenges related to the near-monopolies of mobile financial services providers and the implications on the traditional commercial banking sector as well as for consumer protection. We also examine the implications of regulatory gaps and risks related to e-money including the market dominance of BigFintech (BFT) companies offering e-money. The paper also examines BFTs from the perspective of their use of government-issued digital currencies and/or development or use of private-issued digital currencies.

An examination of stablecoins is then undertaken with regard to the implications and relationship with existing global payment systems, outlining the limited benefits for developing countries in comparison to existing payment systems. Global stablecoins such as the proposed Diem are examined with a specific emphasis related to the macroeconomic implications for LDCs. Likewise,
the paper provides a targeted analysis of the potential macroeconomic implications of CBDCs particularly for LDCs, drawing on key examples of CBDC and digital currencies that have been launched or are being piloted. We provide a section on the implications of digital currencies in the African context as it is home to most of the world’s LDCs, and is an ongoing focal point for mobile money, financial inclusion technology and digital currencies. The implications of the COVID-19 pandemic are also discussed for the African context as are the global considerations of shadow banking.

The paper concludes with a summary of the potential risks and macroeconomic implications both nationally and internationally including those related to the fragmented regulatory approaches as well as the emerging technology and governance structures that do not fall within traditional regulatory oversight and mechanisms. It extrapolates key points to better inform the dialogue
around a new generation of governance innovations to address the emerging trends, risks and vulnerabilities, particularly in LDCs, and around a potential gap between national fiscal and onetary policy and the capabilities of nations to execute such policies.

EINER ELHAUGE, Harvard Law School
Email: elhauge@law.harvard.edu

Recent work has argued that a corporate discretion to advance the interests of stakeholders is illusory and undesirable. This article argues that, to the contrary, such discretion is both inevitable and desirable.

LAN NGUYEN, VinUniversity
Email: lanntm.hrc@gmail.com
DUNG THUY THI NGUYEN, University of Otago - Department of Accountancy and Finance, Academy of Finance
Email: nguyenthuydung.aug88@yahoo.com

We utilize the staggered adoption of Universal demand (UD) laws, which significantly reduces the shareholder litigation rights of listed banks incorporated in twenty-three U.S. states during the period from 1989 to 2005, as a quasi-natural experiment to examines the impact that shareholder litigation rights on bank dividends. The result of the difference-in-difference analysis show that weakened shareholder litigation rights leads to an increase in bank dividend. Our results are robust to various sensitivity analyses, falsification tests and events that happened around the time of UD laws adoptions. We further find that the impact of UD laws is more pronounced for banks with greater agency conflicts and higher information asymmetry. However, we find no evidence that litigation rights can affect banks’ share repurchase activities. Overall, our results align with the substitution agency model which argues that dividend payments can be used as a substitute mechanism to reduce the increased conflict between shareholders and managers.

TADEUSZ DUDYCZ, Wroclaw University of Science and Technology, Faculty of Management
Email: tadeusz.dudycz@pwr.edu.pl
PAWE? MIELCARZ, Kozminski University
Email: pmielcarz@alk.edu.pl

Relying on an unbalanced panel of firm-level data on Polish