THE ROLE OF DIGITAL CURRENCIES IN SHAPING FUTURE ECONOMIES

Abstract

Digital currencies, encompassing cryptocurrencies and central bank digital currencies (CBDCs), are transforming the global economic landscape. Their decentralized nature, facilitated by blockchain technology, challenges traditional financial systems, offering improved transparency, security, and efficiency. Cryptocurrencies such as Bitcoin and Ethereum have gained traction as alternatives to conventional currencies, while CBDCs represent government-backed efforts to modernize monetary frameworks. The role of digital currencies extends beyond payments, influencing areas like cross-border trade, financial inclusion, and monetary policy. As economies adopt these innovations, challenges like regulatory compliance, cybersecurity, and environmental sustainability arise. This paper explores the multifaceted impact of digital currencies, shedding light on their potential to shape future economies through technological advancements and policy shifts.