Digital Currency and Nigerian Economic Growth

Abstract

There are several issues and solutions regarding the theoretical connection between digital money and economic growth. There are issues with digital currency's distribution, stability, and compatibility with fiat money. Although this structure theoretically allows stability of price, however, sensible monetary regulation and its effective distribution continue to be more pressing concerns. The study examined how digital currency affects Nigeria's economic growth. The average annual value of bitcoin (BTC) and Binance coin (BNB) were used to analyze digital currency, while the gross domestic product was used to gauge economic growth. Ex-post facto method was adopted by the study. Data from secondary sources spanning a decade (2014–2023) was used in the study. However, data on the gross domestic product was taken from the CBN Statistical Bulletin, while the metrics of digital currency (BTC and BNB) were taken from Coinmarketcap online platform. Descriptive statistics, correlation and panel regression analysis were used to examine the collected data. According to the results, there was no discernible impact of either Bitcoin or Binance on the GDP of Nigeria between 2014 and 2023. The analysis concludes that the average value of bitcoin and binance coins has no significant effect on Nigeria's GDP. As a result of this, when thinking about regulating cryptocurrencies, the Nigerian government was advised to implement safeguards against the currency's extreme volatility and susceptibility to illicit activity in the country.