What is it about?
This study examines how uncertainty surrounding cryptocurrencies and central bank digital currencies affects exchange-rate stability in eight West African countries. Using weekly data from 2015 to 2023, it assesses how digital-market shocks influence currencies such as the Ghanaian cedi, Nigerian naira, and Sierra Leonean leone. The findings show that cryptocurrency price and policy uncertainty strongly transmit to West African currencies, while CBDC uncertainty has a weaker effect. Most currencies are vulnerable to these shocks, especially during periods of high global uncertainty. The study highlights the need for stronger regional policies to manage risks arising from the expansion of digital finance.
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Why is it important?
Digital currencies are becoming increasingly relevant to financial markets, yet their relationship with currency volatility in West Africa remains insufficiently understood. This study examines how volatility shocks move between Bitcoin and seven West African currencies across different time horizons. Its findings provide useful insights into regional currency risk, financial market interconnectedness, and the potential implications of digital currencies for investment and financial stability.
Perspectives
This research contributes to my broader interest in financial market interconnectedness and the transmission of uncertainty across markets. I find its regional focus particularly important because West African currencies face considerable volatility, while digital currencies are attracting growing attention as alternative financial assets. Understanding these relationships can help investors make more informed portfolio decisions and support discussions about financial risk management in the region.
Andrew Bram
Zhejiang Gongshang University
Read the Original
This page is a summary of: Navigating currency volatility in West Africa: the role of digital currency uncertainty, International Journal of Emerging Markets, October 2026, Emerald,
DOI: 10.1108/ijoem-07-2025-1547.
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