Lambis Dionysopoulos

About

I am a PhD candidate in Finance at Henley Business School, University of Reading, a Visiting PhD Researcher in the Department of Informatics at King’s College London, and a Teaching and Research Fellow at the Institute for the Future, University of Nicosia. Previously, I was Research Lead at the EU Blockchain Observatory and Forum. I hold a Bachelor’s in Business Administration from the Athens University of Economics and Business and a Master’s in Blockchain and Digital Currency (Fintech) from the University of Nicosia.

Research Interests

Fintech, cryptocurrencies, market microstructure

Publications

Dionysopoulos, L., Makridis, C., Forthcoming. Do Central Bank Digital Currencies Displace Stablecoins? Journal of the Royal Statistical Society: Series A, Revise and Resubmit, Available via email.
Abstract:
Do central bank digital currencies (CBDCs) displace the demand for stablecoins? Using data between 2020 and 2023, we study the effects of CBDC adoption and rhetoric on the demand for stablecoins, allowing for heterogeneity in the degree of attentiveness in a country, controlling for other time-varying shocks around monetary policy speeches and announcements. We find that demand for stablecoins declines, particularly when there is a high degree of attentiveness. Our results suggest suggest that an unintended consequence associated with the adoption of CBDCs, particularly with the displacement of stablecoins and private banking solutions, and even mere rhetoric by central bankers can stifle growth in this market.
Keywords:
Blockchain; Central Bank Digital Currencies; Stablecoins
Dionysopoulos, L., & Urquhart, A., 2024. 10 years of stablecoins: Their impact, what we know, and future research directions. Economics Letters, 244, p.111939. Available at: https://doi.org/10.1016/j.econlet.2024.111939.
Abstract:
This paper highlights the growth and importance of stablecoins since they were launched 10 years ago. We outline their impact on the cryptocurrency ecosystem as well as the financial system as a whole, while also summarising the main findings in the literature. Finally, we outline future research directions.
Keywords:
Stablecoins; Cryptocurrencies; Fintech; Future directions; Financial intermediaries
Dionysopoulos, L., Marra, M., & Urquhart, A., 2024. Central bank digital currencies: A critical review. International Review of Financial Analysis, 91, p.103031. Available at: https://doi.org/10.1016/j.irfa.2023.103031.
Abstract:
This critical literature survey offers a comprehensive understanding of the key aspects and implications of central bank digital currencies (CBDCs) as a rapidly evolving area of academic and policy research. We review in depth the key discussions around motivations for the introduction of CBDCs and their design (looking at options of availability, provision, access, and supporting infrastructure). In addition, we review studies and arguments laid out on the implications that the introduction of CBDC may have for monetary policy and financial stability. Finally, we identify sub-areas of CBDC research that need further investigation in future research.
Keywords:
Central bank digital currency; CBDC; Monetary policy; Financial stability; Blockchain

Working Papers

Dionysopoulos, L., Marra, M., & Urquhart, A., Forthcoming. Growth Drivers of FinTech Innovations: Evidence from Stablecoins. Working Paper, Available via email.
Abstract:
This paper investigates the determinants of stablecoin supply growth, focusing on the important role of issuer profitability. Our analysis reveals that the ability of stablecoin issuers to profitably invest their reserves in financial instruments significantly drives their growth. Specifically, large issuers like Tether (issuer of USDT) leverage this capacity to enhance their market presence through dynamic reserve management strategies that are responsive to market conditions. This study broadens our understanding of stablecoin growth by highlighting the importance of issuer profitability and suggesting indirect methods for issuers to foster stablecoin demand and holding. Our findings also offer valuable insights for central bankers, regulators, policymakers, and other stakeholders, considering the evolution of money, particularly in the wake of Central Bank Digital Currencies (CBDCs) in response to the growing size and importance of stablecoins.
Keywords:
Stablecoins; Profitability; Cryptocurrency; Fintech; Tether; Growth
Dionysopoulos, L., Marra, M., & Urquhart, A., Forthcoming. Flights to Digital Assets: Evidence from Conflict and Sanctioned Economies. Working Paper, Available via email.
Abstract:
This paper examines the increased attention and resulting engagement with digital assets among Russian users following the 2022 invasion of Ukraine and the subsequent imposition of economic and financial sanctions. We document a marked surge in interest from Russian retail investors particularly in stablecoins (Tether). This heightened interest corresponds to observable shifts in blockchain activity, most notably a redistribution of holdings from larger to smaller addresses, indicating an increase in usage among smaller retail users. Therefore, our findings suggest that cryptocurrencies can act as digital haven for retail users in conflict and sanctioned economy, enabling them to circumvent financial sanctions and protect the value of their assets.
Keywords:
Stablecoins; Sanctions; Blockchain; Russia-Ukraine War; Safe Haven Assets.
Dionysopoulos, L., Marra, M., & Urquhart, A., Forthcoming. The Economics of Layer 2 Blockchains. Working Paper, Available via email.
Abstract:
This paper examines the economic implications of Ethereum’s rollup-centric roadmap, specifically how Layer 2 (L2) adoption affects Layer 1 (L1) value accrual following the Dencun upgrade. We document a decline in key L1 performance metrics post-upgrade, suggesting a structural shift in Ethereum’s economic model. While early L2 adoption initially drives demand for Ethereum’s data availability (DA), our analysis reveals a non-linear relationship: beyond a critical threshold, L2 activity becomes extractive, diverting economic value from L1 and accelerating the transition to alternative DA (altDA) providers. This dynamic creates a ``Goldilocks Zone'', where moderate L2 adoption enhances L1 metrics, but excessive reliance on rollups erodes Ethereum’s ability to capture fees and sustain its role as the dominant settlement layer. These findings underscore the growing trade-offs between scalability and decentralization in Ethereum’s modular design and raise fundamental questions about its long-term economic viability amid the rise of competing DA solutions.
Keywords:
Coming soon...
Dionysopoulos, L., & Urquhart, A., Forthcoming. Do Decentralized Markets Beat Centralized Forecasters? Evidence from the 2024 Presidential Elections Working Paper, Available via email.
Abstract:
This paper examines whether decentralized blockchain-based prediction markets enhance forecasting accuracy compared to traditional prediction markets and statistical models. Through a comparative analysis of three prediction markets — Polymarket (decentralized), PredictIt (centralized), and FiveThirtyEight (poll aggregator) — during the 2024 U.S. presidential election, we find a statistically significant hierarchy: decentralized markets outperform centralized counterparts, which in turn surpass poll aggregation. Decentralized platforms’ censorship-resistant design, global participation, and reduced information suppression may explain their superior accuracy. Our results position decentralized prediction markets as robust tools for synthesizing crowdsourced information in real time, particularly in contexts requiring resilience to censorship and dynamic data aggregation.
Keywords:
Prediction Markets; Polymarket; US Elections; Polls