Two law researchers say regulators should take the cryptomarket into serious consideration, according to an Oxford Law blog post.
Dr. Hadar Jabotinsky and Dr. Roee Sarel considered in the post how investors in crypto should respond to worldwide emergencies, and if the market presents a systematic risk that could possibly affect traditional financial markets.
The researchers noted that digital currencies have a “salient advantage” in their decentralization. And they noted that many studies find a weak correlation or no correlation between the cryptomarket and the stock market. As a result, investors might find a safe haven in them. However, they noted that a correlation could occur in an emergency.
They also noted, “information asymmetries may make it attractive to engage in ‘pump-and-dump’ schemes, where sophisticated investors lure uninformed investors into the cryptomarket by creating an artificial demand for tokens and then swiftly selling their tokens, leaving the uninformed investors with a loss.”
In separate news, the National Development and Reform Commission (NDRC) noted that blockchain will come together with burgeoning technologies like artificial intelligence (AI), internet of things (IoT) and cloud computing to back the systems China uses to handle the flow of data in the years to come, per a CoinDesk report.
An NDRC subsidiary has been moving on a new blockchain service network that would give firms access to the necessary tools to create applications based on the blockchain. It will reportedly soon open for global firms, and it already rolled out for commercial use within the country.
The NDRC is a department that creates strategies and policies for the Chinese economy’s direction. It has put forward supportive policies and guidance for industries seen to be essential for the economic strategy of the government in the past, per the report.
In 2018, it inked a deal with the China Development Bank to offer 100 billion yuan ($14.1 billion) in financing to firms at work in emerging tech like IoT and AI.