DIGITAL CURRENCIES AND HYPERINFLATION

OPPORTUNITIES FOR FINANCIAL INCLUSION AND STABILITY

Abstract

This study explores the relationship between digital currencies and hyperinflation, focusing on their potential to enhance financial inclusion and stability. The primary objectives include assessing the role of FinTech innovations in mitigating hyperinflation, evaluating the impact of digital currencies on financial inclusion, and identifying key challenges and opportunities for adopting digital currencies in hyperinflationary economies. A quantitative research methodology is employed, targeting Financial Technology (FinTech) Entrepreneurs registered with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in Kano as of 2024. Utilizing Krejcie and Morgan’s (1970) formula, a sample of 103 respondents is determined to be statistically significant for analysis. Convenience sampling is used to efficiently collect data from readily available participants, and online questionnaires facilitate broad data collection. The findings indicate that FinTech innovations significantly help mitigate the effects of hyperinflation, while digital currencies enhance access to financial services for unbanked populations. However, challenges such as regulatory barriers and technological infrastructure gaps hinder broader adoption. The study concludes that while digital currencies present promising solutions for financial stability, addressing these challenges is crucial. Recommendations include developing supportive regulatory frameworks, enhancing digital literacy, and investing in technological infrastructure to foster digital currency adoption. By implementing these strategies, stakeholders can harness the potential of digital currencies to improve financial inclusion and stability in hyperinflationary economies