CRYPTO-ECONOMICS: EVALUATING THE ROLE OF DIGITAL CURRENCIES IN NATIONAL MONETARY POLICY

Abstract

The emergence of digital currencies has initiated a paradigm shift in the global financial ecosystem, prompting policymakers to reconsider the frameworks that govern national monetary systems. This study explores the intersection of crypto-economics and monetary policy, focusing on how digital currencies—both decentralized cryptocurrencies and central bank digital currencies (CBDCs)—are influencing traditional tools of economic regulation. It evaluates the challenges and opportunities posed by digital assets in achieving policy objectives such as inflation control, financial stability, and currency sovereignty. Through comparative analysis and case studies, the paper highlights how various nations are integrating or resisting digital currency innovations within their policy frameworks. The findings suggest that while digital currencies offer enhanced transaction efficiency and financial inclusion, they also pose regulatory, security, and macroeconomic challenges that require adaptive policy measures.