Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Can altcoins become viable alternatives to African fiat currencies?

Can altcoins become viable alternatives to African fiat currencies? The paper aims to examine the asymmetric response of three major altcoins to shocks in six African fiat currencies in a time-frequency space.Design/methodology/approachData are for the period 10th August 2015 to 2nd February 2019 at a daily frequency. The authors capture the time and frequency information in the return series of the currencies using the ensemble empirical mode decomposition. The authors implemented quantile regression and quantile-in-quantile regression on the decomposed series to test the response of altcoins to both positive and negative shocks in the fiat currencies across time to see if the altcoins are viable alternatives to African fiat currencies.FindingsThe outcome of the study suggests that altcoins behave differently from African fiat currencies and are viable alternative digital currencies and good hedges for African fiat currencies from the medium-term.Research limitations/implicationsPolicymakers in Africa and across the globe can follow this paper to mitigate currency crises by adopting altcoins as alternatives to fiat currencies. Forex traders can also mitigate trade risk by using altcoins to hedge dollar/African fiat currency exchange rate risk.Originality/valueThe research was conducted by the authors and has not been published in any journal. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Development Issues Emerald Publishing

Can altcoins become viable alternatives to African fiat currencies?

Download PDF
30 pages

Loading next page...
 
/lp/emerald-publishing/can-altcoins-become-viable-alternatives-to-african-fiat-currencies-8XN4LePtis

References (59)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1446-8956
DOI
10.1108/ijdi-04-2021-0088
Publisher site
See Article on Publisher Site

Abstract

The paper aims to examine the asymmetric response of three major altcoins to shocks in six African fiat currencies in a time-frequency space.Design/methodology/approachData are for the period 10th August 2015 to 2nd February 2019 at a daily frequency. The authors capture the time and frequency information in the return series of the currencies using the ensemble empirical mode decomposition. The authors implemented quantile regression and quantile-in-quantile regression on the decomposed series to test the response of altcoins to both positive and negative shocks in the fiat currencies across time to see if the altcoins are viable alternatives to African fiat currencies.FindingsThe outcome of the study suggests that altcoins behave differently from African fiat currencies and are viable alternative digital currencies and good hedges for African fiat currencies from the medium-term.Research limitations/implicationsPolicymakers in Africa and across the globe can follow this paper to mitigate currency crises by adopting altcoins as alternatives to fiat currencies. Forex traders can also mitigate trade risk by using altcoins to hedge dollar/African fiat currency exchange rate risk.Originality/valueThe research was conducted by the authors and has not been published in any journal.

Journal

International Journal of Development Issues – Emerald Publishing

Published: Feb 18, 2022

Keywords: Altcoins; African fiat currencies; Ensemble empirical mode decomposition (EEMD); Quantile-in-Quantile regressions (QQR); C58; F31; G10; G11

There are no references for this article.