Impact of Digital Currency on Deposit Money Bank in Nigeria

Ahmad B El-Yaqub and Yahaya Ismail
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Ahmad B El-Yaqub: Faculty of Plantation and Agrotechnology, Universiti Teknologi MARA Melaka Branch, 77300 Merlimau, Melaka, Malaysia
Yahaya Ismail: Department of Economics, University of Abuja

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 1, 1363-1377

Abstract: This study investigates the impact of digital currency on deposit money banks in Nigeria from 2010 to 2023. Employing a quantitative approach, the study utilizes econometric analysis, specifically the Ordinary Least Squares (OLS) method, to examine the relationship between digital currency transactions, money supply, interest rates, and deposit money bank performance. The study addresses the stationarity of time series variables through unit root tests and employs the Johansen cointegration test to determine long-term equilibrium relationships. The Error Correction Mechanism (ECM) model is then estimated to analyze the dynamic adjustment process. The findings reveal a significant negative impact of digital currency transactions on deposit money, while money supply and interest rates exhibit positive correlations. The study concludes with policy recommendations for navigating the evolving landscape of digital finance in Nigeria.

Date: 2025
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