Editor's note: This article is from Babbitt Information (ID: bitcoin8btc) , author: Avi Mizrahi, compiled by: Wendy.
Bitcoin could provide economic researchers with a new way to expose currency manipulation and capital controls that had never been seen before due to a lack of well-established benchmarks. This method is similar to that used by arbitrage traders - comparing prices in different cryptocurrency markets around the world.
Bitcoin Price and Global Forex Benchmarks
Although most countries have stated that they adopt a floating exchange rate system, that is, let the free market determine the exchange value of their fiat currency with other currencies, in fact, almost all central banks have more or less influence on the foreign exchange market. Economists will use some informal methods to track and measure the impact, such as the comparison of international oil prices or the famous Big Mac index (an informal economic index that measures whether the exchange rate of two currencies is theoretically not. Reasonable), the final results are not ideal. According to new research by economist Gina Pieters, Bitcoin could provide researchers with a way to detect central bank manipulation while exposing capital controls. The final result is obtained by comparing the actual exchange rate of each cryptocurrency exchange with the national fiat exchange rate. Her research shows that standard data sources for detecting manipulative behavior suffer from several flaws: Access to this type of data is expensive, likely to be two or three years old, and it is not very reliable or detailed enough. Bitcoin’s price data does not have these flaws, and in addition, it can completely correct the distorted data and standardize the data through the cryptocurrency market.
Take Argentina for example
This research report analyzes the market situation in many countries around the world, but the main focus is on the currency market in Argentina. Although the peso is no longer pegged to the U.S. dollar since December 2015, local newspapers publish the unofficial exchange rate (Dólar Blue), which provides an opportunity to test the Bitcoin exchange rate. Dólar Blue deviates significantly from the official exchange rate, but it is clear that the exchange rate of Bitcoin exchanges will fluctuate with the fluctuation of the exchange rate of Dólar Blue.
The researchers say the methodology can be used in some economic systems where the official exchange rate is unknown.
Obtaining these kinds of results was often slow, difficult, or nearly impossible until Bitcoin price data was used. This research could provide a new tool for detecting capital controls.