Digital currencies: The present and the future

Abstract

Subject. The article considers digital currencies in the context of global and national financial system development. Objectives. The purpose is to identify and justify the role of digital currencies in the global finance development and the place of modern central bank policies in the development of digital currencies, to underpin the need for changing approaches to digital currencies on the part of central banks, and to predict possible scenarios for the development of digital currencies on the global scale. Methods. The study applies methods of logical and statistical analysis, the comparative approach, and systematization. Results. The paper describes major pros and cons of digital currencies by comparing them with cryptocurrencies; identifies the beneficiaries of the introduction of digital currencies in countries with the most developed strategies for the introduction of national digital currencies. It also unveils barriers to a large-scale introduction of digital currencies to the world market, and highlights the main areas of their use. I developed three scenarios of digital currencies introduction to the world market. Conclusions. A large-scale introduction of digital currencies as a means of international settlements is not possible at the present stage, however, their use as a tool for dealing with financial crises is the most realistic scenario.