A Critical Review on Future Trends of Digital Currency

Abstract

In today's world, digital currency has become the most important part of our lives. Banks, the financial sector, and governments are encouraging digital currency exchange, and other online digital money has the potential to transform the financial sector. Through my research on digital currency, I will outline advantages, threats, and possible issues associated with it. When we talk about digital currency, it means more than just currencies. Cryptocurrencies are a part of digital currency. Digital currency includes various forms like cryptocurrencies, virtual currencies, and central bank digital currencies (CBDC). When Bitcoin started in 2009, it caught the interest of tech fans and curious people. A country's Central Bank issues Central Bank Digital Currency (CBDC), which represents a digital form of currency. Unlike cryptocurrencies like Bitcoin, CBDCs are usually supported by the governments and recognized as lawful tender. They represent a digital version of a nation’s official currency, and their purpose is to provide a digital alternative to physical cash but with any opportunity come risks like price uncertainty, Cybersecurity, etc. In December 2023, the Unified Payments interface (UPI) achieved a significant milestone, with over 1,200 crores transactions valued at more than 18 lakh corers, marking a peak in both transaction count and value [1]. Keywords: Cryptocurrency, Banks, Digital currency, CBDC, Bitcoin, Cybersecurity, Unified Payments Interface (UPI).