The research, published in the journal Frontiers in Blockchain by Teboho Charles Mashao of North-West University’s School of Economic Sciences in Potchefstroom and Ireen Choga of the university’s Mafikeng Campus, set out to answer a question that has mostly been addressed through theory and conceptual reviews until now: does blockchain adoption actually drive trade, and if so, how? Using quarterly time series data spanning from the first quarter of 2013 to the final quarter of 2024, the pair applied two closely related econometric techniques, the autoregressive distributed lag (ARDL) model and its nonlinear counterpart, the NARDL, to disentangle the relationship between blockchain activity and trade flows.

The headline finding is unambiguous. Blockchain technology, proxied in the study by Bitcoin transaction volume as the most widely recognized practical application of the underlying distributed ledger, has a positive and statistically significant effect on South Africa’s international trade in the long run. According to the model, a one percent increase in blockchain activity is associated with a 0.0471 percent rise in international trade, measured as the combined value of exports and imports relative to gross domestic product. The short-run coefficients tell the same story, with blockchain activity again showing a positive and significant effect on trade within the quarter.

But the study’s most intriguing contribution lies in what happens when the relationship is allowed to be asymmetric. By decomposing blockchain activity into positive and negative partial sums using the nonlinear ARDL framework developed by Shin, Yu and Greenwood-Nimmo, the researchers discovered that the effects of blockchain on trade are not symmetrical. A positive shock, meaning an increase in blockchain activity, produces a significant and positive long-run boost to trade of roughly 0.0409 percent. A negative shock, by contrast, has a negative but statistically insignificant effect, meaning that dips in blockchain activity do not appear to drag trade down in any meaningful way. The Wald test confirmed that this asymmetry is statistically significant in the long run, marking the first time such nonlinear dynamics have been documented at the country level for blockchain and trade.

The theoretical scaffolding for these results draws on two classic frameworks. Transaction cost theory, originally proposed by Ronald Coase and later developed by Oliver Williamson, holds that economic actors organize their exchanges to minimize the friction costs involved in trading. Blockchain, by removing intermediaries, reducing paperwork, and guaranteeing transparency through a permissioned distributed ledger accessible only to authorized parties, directly attacks those frictions. The technology acceptance model, meanwhile, explains why adoption accelerates: firms and individuals embrace technologies they perceive as useful and easy to deploy, and rising Bitcoin transaction volumes in the study’s data signal exactly that kind of growing engagement with blockchain-based systems.

The practical mechanics of how blockchain facilitates trade are worth spelling out. In the traditional international trade model, an exporter and importer establish a business order, then engage banks to handle letters of credit and bills of lading, with documents, cash, and logistics flowing through a paper-heavy chain that suffers from limited transparency, high costs, and time-consuming authentication. In the blockchain model, a permissioned distributed ledger allows peer-to-peer transactions with real-time information access for all authorized parties. Smart contracts, self-executing agreements coded onto the blockchain, can guarantee payment automatically once pre-agreed conditions are met, cutting both delays and costs while reducing the risk of fraud, counterfeiting, and tampering with trade documents.

Beyond blockchain itself, the study’s control variables produced a mix of expected and surprising results. The exchange rate emerged as the most powerful driver of trade, with a one percent depreciation of the local currency associated with a 0.5299 percent increase in international trade in the long run, a finding consistent with the Marshall-Lerner condition. Foreign direct investment and gross domestic product also showed positive and significant long-run effects, aligning with the gravity model of trade, which holds that larger economies trade more. Inflation, counterintuitively, showed a positive but statistically insignificant long-run relationship, and taxation on international trade was likewise insignificant in the linear model, though it turned negative and significant in the nonlinear specification. The error correction term of −0.2459 indicated that roughly a quarter of any disequilibrium in the trade relationship is corrected each quarter, pointing to a slow but steady adjustment toward equilibrium.

South Africa makes a particularly compelling case study because it sits at the forefront of blockchain innovation on the African continent. Together with Nigeria and Kenya, it accounts for roughly 80 percent of blockchain activity in Africa, with key applications concentrated in insurance, finance, telecommunications, and health. Yet the continent’s blockchain journey has been constrained by limited technical skills, insufficient infrastructure, and high costs, barriers that have prevented many African economies from fully capitalizing on the technology’s economic promise. By focusing on a single country rather than a global aggregate, the study addresses a gap in the literature, since institutional and economic conditions vary so widely that findings from one context cannot simply be generalized to another.

The policy implications are clear. The authors recommend that South African policymakers actively promote blockchain adoption in international trade by crafting supportive regulatory frameworks and investing in blockchain infrastructure. Such measures, they argue, could create a secure, transparent, and efficient trade environment that lowers barriers for all participants and fosters deeper global economic integration. Small and medium-sized enterprises, in particular, stand to benefit from blockchain-enabled trade processes that reduce paperwork and open access to larger customers and suppliers worldwide. The study also calls for policies conducive to foreign direct investment, exchange rate stability, and economic growth, all of which the data show to be meaningful drivers of trade volume.

The research is not without limitations. Bitcoin transaction volume, while the most common proxy in the blockchain literature, represents only one of many applications that the underlying technology enables, and the authors acknowledge that future work should explore other blockchain metrics and alternative estimation techniques. They also suggest extending the analysis to examine blockchain’s effects on exports and imports separately. Still, as one of the first data-driven, country-specific empirical analyses of blockchain and trade, and the first to document asymmetric long-run effects, the study offers a template for how economists can move beyond conceptual enthusiasm and measure, with statistical rigor, whether the blockchain revolution is actually delivering on its promises for developing economies.

Subject of Research: The empirical impact of blockchain technology on international trade in South Africa

Article Title: The effect of blockchain technology on international trade in South Africa

Article References: Mashao, T. C., & Choga, I. (2026). The effect of blockchain technology on international trade in South Africa. Frontiers in Blockchain, 9, Article 1880173. https://doi.org/10.3389/fbloc.2026.1880173

Image Credits: AI Generated

DOI: 10.3389/fbloc.2026.1880173

Keywords: blockchain technology, international trade, South Africa, ARDL, NARDL, Bitcoin, transaction cost theory, foreign direct investment, exchange rate, economic growth, trade policy, distributed ledger