The research is based on the monetary policy data provided by official website of China People's Bank and the digital currency transaction information of Wind financial terminal system, and the data from January 2015 to December 2023 are selected for analysis. Using the vector autoregressive (VAR) model, this paper analyzes the dynamic relationship among digital currency trading volume (DCV), money supply (M2) and interest rate (R). The empirical test results show that digital currency trading volume has a significant positive impact on money supply, but a significant negative impact on interest rates. The analysis of impulse response function shows that digital currency trading volume has an immediate and significant positive impact on the money supply, and an immediate negative impact on the interest rate. The results of variance decomposition reveal the dynamic relationship between digital currency, money supply and interest rate on different time scales, in which digital currency is an important influencing factor in the short term, while money supply dominates in the long term. This study provides useful reference and enlightenment for monetary policy makers, helps to understand the complex interaction between digital currency and monetary policy, and provides theoretical support for maintaining financial stability, promoting economic growth and enhancing the effectiveness of monetary policy.