Taming the blockchain beast? Regulatory implications for the cryptocurrency Market

Savva Shanaev; Satish Sharma; Binam Ghimire; Arina Shuraeva

doi:10.1016/j.ribaf.2019.101080

Taming the blockchain beast? Regulatory implications for the cryptocurrency Market

Savva Shanaev^*, Satish Sharma, Binam Ghimire, Arina Shuraeva

^*Corresponding author for this work

Accounting and Financial Management

Research output: Contribution to journal › Article › peer-review

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Abstract

This paper uses a unique dataset of 120 regulatory events from five classes to test the relevance of the regulatory framework for cryptocurrency value. Time-series market-wide estimates and panel estimates for 300 individual coins and tokens show statistically and economically significant impact of anti-money laundering and issuance regulation. Tighter regulation and more active role of government decrease cryptocurrency prices, evidencing that potentially lower risks and wider adoption commonly attributed to the establishment of the regulatory framework do not compensate for respective efficiency and consumer utility losses. The market is generally efficient in reflecting regulatory information in cryptocurrency prices.

Original language	English
Article number	101080
Journal	Research in International Business and Finance
Volume	51
Early online date	9 Aug 2019
DOIs	https://doi.org/10.1016/j.ribaf.2019.101080
Publication status	Published - 1 Jan 2020

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Taming_the_Blockchain_Beast_Final Manuscript_RIBAFAccepted author manuscript, 685 KBLicence: CC BY-NC-ND

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AB - This paper uses a unique dataset of 120 regulatory events from five classes to test the relevance of the regulatory framework for cryptocurrency value. Time-series market-wide estimates and panel estimates for 300 individual coins and tokens show statistically and economically significant impact of anti-money laundering and issuance regulation. Tighter regulation and more active role of government decrease cryptocurrency prices, evidencing that potentially lower risks and wider adoption commonly attributed to the establishment of the regulatory framework do not compensate for respective efficiency and consumer utility losses. The market is generally efficient in reflecting regulatory information in cryptocurrency prices.

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KW - Event studies

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Taming the blockchain beast? Regulatory implications for the cryptocurrency Market

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