Effect of Bitcoin Trading Volume on Cashless Policy Implementation by Nigerian Commercial Banks

The effect of bitcoin trading volume on the implementation of cashless policy in Nigeria from 2014-2025 was considered in this study. With the growing popularity of cryptocurrencies, notably Bitcoin, concerns have arisen about the impact this has on the effectiveness of the Central Bank of Nigeria (CBN)'s cashless policy. Specifically, the study examined the effects of Bitcoin trading volume, inflation, exchange rate, interest rate, and economic growth on the implementation of cashless policy, measured by the total value of electronic payment transactions. The study was founded on disruptive innovation theory and innovation diffusion theory, financial intermediation theory and technology acceptance model. Secondary data were gathered from the Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement System (NIBSS), the World Bank, and the International Monetary Fund (IMF), as well as Chainalysis reports. Ordinary Least Square (OLS) estimation technique was used to analyze the data. The results showed that Bitcoin trading volume has a positive and statistically significant relationship with the cashless policy in Nigeria, suggesting that the trading of bitcoins complements the development of digital payment in Nigeria. Besides, it was observed that exchange rate had a positive and significant impact on cashless transactions whereas interest rate had negative and significant impact. The results indicated that cashless policy implementation and inflation were negatively associated but not statistically significant while the economic growth was positively associated and marginally significant for the adoption of electronic payment. The study shows that Bitcoin trading activities have been found to facilitate the development of the digital financial ecosystem and are positively contributing to the attainment of the Nigeria's cashless policy goals. The authors call for a well-considered approach by the regulatory bodies to foster innovation in the cryptocurrency space while promoting financial stability and consumer protection. It also stresses the need to continue investing in the infrastructure of digital payment, innovation in financial technology, and macroeconomic stability to strengthen the cashless policy. The study adds to the existing body of research on cryptocurrency adoption and digital finance by offering empirical evidence of the relationship between Bitcoin trading volume and the implementation of a cashless policy in an emerging economy.