On May 27, 2025, Alexander Lipton, Global Head of Research & Development at Abu Dhabi Investment Authority, stopped by the lab for his talk, “Monetary Circuit Model, Cross-Border Payments, and Ouroboros Supply Chain in Times of Uncertainty.”
The talk starts with a quick exposition of the modern monetary circuit model (MMCT), considered an integral part of the general dynamic input-output model. Then, it analyzes money creation by the banking system and highlights central banks’ role as an anchor that keeps the financial system together. Particular emphasis is placed on interactions among different systems and foreign exchange.
Second, the monetary system’s pain points and frictions are discussed, and it is argued that distributed ledger technology (DLT) can remove some of these frictions. The most recent developments, including central bank digital currencies (CBDCs), stablecoins (SCs), and digital trade coins (DTCs), and their potential applications are reviewed. DeFi (Decentralized Finance), including Automated Market Makers (AMM), is covered. It is shown how AMMs can reorganize forex trading and market-making by proposing a cross-settlement mechanism for digital assets on interoperable blockchains capable of handling CBDCs, SCs, and DTCs.
Third, Digital twins (DTs)—virtual models that mirror physical assets, systems, or processes—are discussed in the context of supply chains (SC). It is argued that SCs have two key enablers: DLT and Artificial Intelligence (AI). Together, these technologies unlock new economic opportunities in tomorrow’s interconnected, data-driven SCs. The promise of DTCs for the smooth running of such SCs is emphasized.
The talk explains the mathematics, economics, and technology behind the above developments and elaborates on their pros and cons.
Alexander Lipton is Global Head, Research & Development at Abu Dhabi Investment Authority, Professor of Practice at Khalifa University, Visiting Professor and Dean’s Fellow at the Hebrew University of Jerusalem, Connection Science Fellow at MIT, and Advisory Board member at ADIA Lab.
Alex is a Co-Founder of Sila, a company providing, digital wallet & ACH payment services, and an advisory board member at several fintech companies worldwide. From 2006–2016, Alex was Co-Head of the Global Quantitative Group and Quantitative Solutions Executive at Bank of America. Earlier, he was a senior manager at Citadel, Credit Suisse, Deutsche Bank, and Bankers Trust.
In addition, Alex held visiting professorships at EPFL, NYU, Oxford University, Imperial College, and the University of Illinois. Before becoming a quant, Alex was a Full Professor of Mathematics at the University of Illinois and a Consultant at the Los Alamos National Laboratory. Risk Magazine awarded him the Inaugural Quant of the Year Award in 2000 and the Buy-side Quant of the Year Award in 2021.
Alex authored/edited twelve books and more than a hundred scientific papers on nuclear fusion, astrophysics, applied mathematics, financial engineering, and distributed ledgers. He frequently gives keynote presentations on Quantitative Finance and FinTech at conferences and forums worldwide.
