Title: Impact of cryptocurrencies on inflation: evidence from BICS countries

Authors: Vaibhav Aggarwal; Mohit Saini; Pankaj Kumar; Mahender Yadav; Adesh Doifode

Addresses: O.P. Jindal Global University, Sonipat, Haryana, India ' Department of Commerce, Maharshi Dayanand University, Rohtak, Haryana, India ' Department of Management Studies, Deenbandhu Chhotu Ram University of Science and Technology, Murthal, Haryana, India ' Department of Commerce, Maharshi Dayanand University, Rohtak, Haryana, India ' Symbiosis School of Banking and Finance, Symbiosis International (Deemed University), Pune, Maharashtra, India

Abstract: Academic research on cryptos has exploded over the past decade; however, the impact of cryptocurrency on inflation in emerging markets is an underexplored research area. This study addresses this by investigating the impact of two major cryptocurrencies - Bitcoin and Ethereum, on inflation in four major emerging countries - Brazil, India, China and South Africa (BICS). Monthly data on cryptocurrencies and inflation (WPI and CPI) is taken from Oct 2017 to Nov 2022. The Vector Auto-Regression (VAR) findings indicate that in BICS countries, there is no significant impact of cryptocurrencies - Bitcoin and Ethereum on the inflation of BICS. The results of this study can be useful for policymakers regarding inflation management and the risks and challenges associated with cryptocurrency adoption.

Keywords: crypto; Bitcoin; emerging market; VAR; VECM.

DOI: 10.1504/IJDIPE.2024.137099

International Journal of Diplomacy and Economy, 2024 Vol.10 No.1, pp.78 - 91

Received: 11 May 2023
Accepted: 07 Aug 2023
Published online: 01 Mar 2024 *

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