The emergence of digital currency has had a significant impact on economic policy while increasingly and profoundly changing the lives of the public. The main research object of this paper is the digital currency that incorporates blockchain and smart contract technology, and it deeply examines how its generation and development impact economic policy and the corresponding regulatory mechanism. The application of blockchain and smart contract technology is used to analyze the characteristics and performance of digital currency, and the advantages and shortcomings of using digital currency are briefly explained. Based on the analysis of related research and practical application requirements, digital currency is being introduced into the DSGE model, which includes households, manufacturers, and other sectors. Impulse response and variance decomposition are used to numerically simulate the impact of digital currency on economic policy and the effectiveness of the regulatory mechanism. The economic policy transmission efficiency is the lowest in the no digital currency scenario, while it is significantly higher in the scenario of full use of digital currency, with interest rate shocks into the maximum degree of change in output and inflation of 0.059% and 0.121%. The variance of each macroeconomic variable in the economic policy regulation scenario shows a significant downward trend, and digital currency contributes to the overall regulation effect of macroeconomic policy.