INSTITUTIONAL FACTORS IN THE FORMULATION OF FINANCIAL TERMS IN INTERNATIONAL COMMERCIAL CONTRACTS
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Abstract
Introduction. The article investigates institutional factors shaping and transforming the financial conditions of international commercial contracts in the current stage of global economic development. The transition from liberal globalization to geo-economic fragmentation has led to the formation of differentiated financial zones based on geopolitical proximity of countries, which has become a decisive barrier to harmonizing parameters of international settlements.
Purpose. The purpose of the article is to provide theoretical justification and analysis of the institutional transformation of financial conditions in international commercial contracts under structural changes in the global economy. The objectives include: identifying the impact of the geo-economic landscape and fragmentation of the global payment architecture; analyzing the role of financial monitoring as an institutional factor shaping new requirements for the initial stage of contract conclusion; and substantiating directions for adapting financial reporting to the use of smart contracts and algorithmic methods of confirming contractual obligations.
Results. The study reveals that dollarization and strengthened banking compliance significantly influence the structure of payment mechanisms and the accessibility of international liquidity. The share of the US dollar in global reserves has fallen below critical thresholds, while the role of alternative currencies, particularly the Chinese yuan, has increased. Enhanced financial monitoring has evolved into a system of institutional control, raising compliance costs and liquidity requirements. At the same time, smart contracts emerge as a technological instrument ensuring the fulfillment of obligations, enabling automated execution of payments, dynamic liquidity management, and transparent auditing under IFRS standards.
Originality. The originality of the research lies in substantiating the convergence of institutional and technological factors that jointly determine the financial conditions of modern international contracts. It highlights how geo-economic fragmentation and fragmentation of the global payment architecture, requiring businesses to reconsider currency clauses and liquidity strategies. Furthermore, the article emphasizes the necessity of adapting financial reporting standards to digital mechanisms of contract execution, thereby integrating regulatory, economic, and technological dimensions. Special attention is given to the role of smart contracts as a new institutional tool that simultaneously ensures compliance, transparency, and efficiency, while transforming the logic of IFRS-based reporting. This dual institutional-technological perspective provides a novel framework for understanding how global trade adapts to systemic challenges and regulatory innovations.
Conclusion. The findings confirm a fundamental transformation of financial conditions in international commercial contracts. Fragmentation of the global payment architecture, compliance monitoring, and digital innovations redefine the logic of settlements and reporting, creating new institutional frameworks for global trade. Contracts increasingly depend on geopolitical alignment, while financial monitoring evolves into a decisive factor shaping liquidity and payment terms. The integration of smart contracts and blockchain technologies demonstrates the emergence of a decentralized and technologically driven system of international finance. The results can be recommended for use by enterprises engaged in foreign economic activity in managing financial risks and developing strategies for adapting business to new institutional conditions of the world economy. Moreover, the study underscores the importance of revising IFRS standards to reflect digital proofs of contract execution, ensuring that financial reporting captures not only monetary outcomes but also technological evidence of compliance. This comprehensive approach strengthens transparency, accelerates auditing, and supports resilience of international trade in an era of geo-economic fragmentation.
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