Digital Currency and Monetary Policy in the South African Economy: Praxis of Financial Dualism and..

The limited adoption of digital currency transactions in many African nations, despite the necessity for a cashless economy, necessitates this research. The goal of this study is to determine the impact of digital currency operations and make recommendations for cashless policy management in Nigeria. In the South African economy, the paper examines the application of financial dualism to digital money and monetary policy. From April 2013 to December 2019, data on crypto-currency market capitalization (Mcap), volume (Vol), and monetary policy rate (MPR) of fourth-month ending quarterly information was taken from Central Bank Digital Currency and the South African Reserve Bank. The Autoregressive Distributive Lag and Augmented Dickey-Fuller unit root tests were performed. The findings of the ADF unit root test were not level-stationary, but At the first level difference, it became motionless. Furthermore, the ARDL findings revealed no positive or significant correlations between crypto-currency market capitalization and volume and monetary policy in the South African economy. In the South African economy, however, there are positive and important linkages in monetary policy. The study indicated that (Mcap) and (Vol) of digital currency were not major policy factors in influencing monetary policies in the South African economy, and so they operate independently. The study therefore determined that whether or not Nigeria adopts and regulates digital currency operations has no impact. As a result, the report advises Nigerians to embrace the digital world in terms of rules in order to get a tax advantage.

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