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The bitcoin market reaction to the launch of central bank digital currencies

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  • Mzoughi, Hela
  • Benkraiem, Ramzi
  • Guesmi, Khaled

Abstract

In this paper, we employ an event study approach to empirically investigate the reaction of the Bitcoin market to the launch of the Bahamas central bank digital currency (SANDDollar) and the Nigeria central bank digital currency (eNaira). Following event windows, the analysis of abnormal returns and their cumulative abnormal returns showed that the reaction of the Bitcoin returns was stronger toward the launch of the Bahamas CBDC than the Nigeria CBDC. Our findings contribute to the extant literature by providing new insights into the relationship between an effective CBDC launch and the Bitcoin market.

Suggested Citation

  • Mzoughi, Hela & Benkraiem, Ramzi & Guesmi, Khaled, 2022. "The bitcoin market reaction to the launch of central bank digital currencies," Research in International Business and Finance, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:riibaf:v:63:y:2022:i:c:s0275531922001866
    DOI: 10.1016/j.ribaf.2022.101800
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    2. Wang, Yizhi & Wei, Yu & Lucey, Brian M. & Su, Yang, 2023. "Return spillover analysis across central bank digital currency attention and cryptocurrency markets," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Lennart Ante & Ender Demir, 2024. "The ChatGPT effect on AI-themed cryptocurrencies," Economics and Business Letters, Oviedo University Press, vol. 13(1), pages 29-38.
    4. Martins, António Miguel, 2024. "Short-term market impact of crypto firms’ bankruptcies on cryptocurrency markets," Research in International Business and Finance, Elsevier, vol. 70(PB).
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    6. Monika Eisenbardt & Tomasz Eisenbardt, 2023. "Can Cryptocurrencies Be Feasibly Adopted as a National Currency? The Perspective of the Younger Generation," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 463-481.
    7. Xin, Baogui & Jiang, Kai, 2023. "Central bank digital currency and the effectiveness of negative interest rate policy: A DSGE analysis," Research in International Business and Finance, Elsevier, vol. 64(C).

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