What makes XRP more immune to regulatory news than other currencies? (The Bank of International Settlements has an answer)


A few days after a bull run has raised investor hope that XRP, despite all criticism, may not be as centralized as critics claim, a new relationship has emerged completely destroying that altered perception that has just begun to gain traction.

The report of the Bank of International Settlements published on September 23, implies that it would be difficult for XRP to remove the stigma of centralization since its network of reliable nodes are almost all controlled by Ripple.

XRP relatively unaffected by regulatory news due to a higher degree of centralization

The main objective of the BIS report, co-author of Stijn Claessens and Raphael Auer, was to evaluate the challenges of bringing cryptocurrencies into the national legislation. They based the study primarily on market reactions to regulatory news flows.

The study focused on seven of the most popular cryptocurrencies in circulation today, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Zcash, Monero and, of course, XRP (Ripple). The price sensitivity of each of these currencies has been carefully monitored as a result of new developments (or the possibility of changes) in the regulatory framework of major economies such as the United States, China, Japan, India and the United Kingdom Kingdom.

Since the study included seven cryptocurrencies and up to seven variables of interest, Claessens and Auer recalibrated the dimensionality by conciseness by constructing a normative news index on the global cryptocurrency or CRNI.

Here is an excerpt from the report which highlights the price fluctuations of the so-called Bitcoin "clones"Compared to that of Bitcoin:

"[…] we find that both the "Bitcoin clones" – Bitcoin Cash and Litecoin – as well as the second evaluation cryptocurrency, Ethereum, react significantly to the CRNI (columns 2-4). The impact is not significantly different from 1, however, that is, they are strongly influenced by these news events like Bitcoin. "

He then touched on the relative changes in Zcash and Monero:

"We will then examine the so-called" dark coins "Monero and Zcash – which add an additional level of anonymity: Monero reacts significantly and stronger than the bitcoin (column 5), while Zcash (for which we only observe less than two years of data given its shorter duration) reacts less (column 6). "

As for the XRP token, the researchers found that its reaction is minimal whenever regulatory news flows caused fluctuations in cryptographic space. According to them, this could be the result of Ripple's strict control over trusted nodes, which, they say, makes XRP "distinct from others, cryptocurrencies without permission."

Bank of international regulations on the Crypto regulation

In conclusion, the report states that regulation does not necessarily have to be bad news for the cryptic space "with price responses that signal in particular a clear preference for a defined legal status, even if a light regulatory regime."

It also invites regulators around the world to develop a new paradigm for a coordinated effort to maximize their impact. However, the researchers also stressed that the lack of such coordinated efforts will not hinder their ability to exercise "effective intervention."

The report also stated that non-specific digital resource warnings do not usually have any significant impact on encryption prices, even if they come from regulatory bodies.



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