Now bitcoin can provide economic researchers a new tool for exposing both currency manipulation and capital controls, in a way never thought possible before due to a lack of a perfect benchmark. This is done using similar methods to those arbitrage traders employ, comparing prices in different cryptocurrency markets around the world.
Also Read: Cobinhood Delists Six Tokens Susceptible to Pump and Dump, Limits Tether Pairs
Using the Bitcoin Price as a Global FX Bechmark
Her study explains that the standard data sources used to detect manipulations have several shortcomings: they are expensive to obtain, they can be two or three years old, and, depending on the source, they may be unreliable or infrequent. The new research demonstrates that the bitcoin price data can circumvent these shortcomings. It also shows how distortions can be corrected as well as how to normalize the data from the noisy cryptocurrency market.
The Argentinian Example
The researcher says that this methodology can be applied to other economies where the unofficial exchange rate is unknown. “Before access to Bitcoin-pricing data such results would be slow, difficult or impossible to construct. The results of this study provide a new tool with which to detect the presence of capital controls.”
What other interesting research subjects should bitcoin economists focus on? Share your thoughts in the comments section below!
Images courtesy of Shutterstock.
Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.
The post Research: Bitcoin Exposes Central Banks’ Currency Manipulation and Capital Controls appeared first on Bitcoin News.
Source: Bitcoin.com