Document Type
Article
Abstract
This study examines the nexus between money demand and cryptocurrencies by estimating two simultaneous equations using Divisia indices as a proxy for money demand and volume traded for cryptocurrencies. The study examines the linkage between cryptocurrencies and money demand and their potential influence over monetary policy actions. It finds that the volume of cryptocurrencies traded negatively influences money demand. Moreover, we see a positive association between money demand and cryptocurrencies, implying that as the demand for money increases, the demand for cryptocurrencies increases. Further, we examine the determinates of cryptocurrencies and report that the return of cryptocurrencies, the financial development index, GDP, inflation, and stock market indices are significant predictors of the demand for cryptocurrencies.
Recommended Citation
Mumtaz, Muhammad Zubair; Smith, Zachary; and Yoshino, Naoyuki
(2025)
"Cryptocurrencies, Money Demand, and Monetary Policy,"
Bulletin of Monetary Economics and Banking: Vol. 28:
No.
2, Article 6.
DOI: https://doi.org/10.59091/2460-9196.1722
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol28/iss2/6
First Page
293
Last Page
312
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Bahrain
Affiliation
University of Bahrain
