Digital currency is a term that is familiar to some people and unfamiliar to others. But if you aren’t aware of it, you must get familiar with it because it has the potential to change our view on money. The recent rise in Ethereum (ETH), Bitcoin (BTC), and various other cryptocurrencies that exist in digital format only, has led global national banks to research the working of these national digital currencies. So, in today’s blog, we will shed light on the topic “5 Ways Digital Currency is Revolutionizing the Financial World” So, without wasting further time let’s get started!!

1. 5 Ways Digital Currency is Revolutionizing the
Financial World
Digital currency is a term that is familiar to some people and unfamiliar to
others. But if you aren’t aware of it, you must get familiar with it because it has
the potential to change our view on money. The recent rise in Ethereum (ETH),
Bitcoin (BTC), and various other cryptocurrencies that exist in digital format only,
has led global national banks to research the working of these national digital
currencies. So, in today’s blog, we will shed light on the topic “5 Ways Digital
Currency is Revolutionizing the Financial World” So, without wasting further
time let’s get started!!

2. What is digital currency?
The type of currency that is available exclusively in the digital format is known
as digital currency. Most of the countries' financial systems are already
dominated by the digital currency. The main difference between digital and
electronic currency is that it is already in your bank accounts and it does not
have a physical form.
You can use an ATM to transfer your electronic currency into physical form but
the same can’t be done in the case of digital currency. You need a digital medium
to exclusively transfer your digital currency because it can’t leave your computer
system.
There are 3 types of digital currencies:
 Cryptocurrency
 Stablecoins
 Central Bank Digital Currency (CBDC)
Also read: 5 best ways to make money online through Internet marketing

3. What is blockchain technology?
Blockchain is a technology that provides a cryptocurrency foundation and it is
commonly used by digital currencies as a distributed ledger. There are 9K+
cryptocurrencies available, according to CoinMarketCap.
What is the present scenario for Digital
currency?
These are the following points regarding the present scenario for Digital
currency:
 Blockchain is highly desirable for stablecoins, but governments are afraid of
losing control over private stablecoin issuers.
 Governments prefer CBDCs (central bank digital currencies) for their control
and backing, while private institutions and retailers prefer private
stablecoins.
 Cryptocurrencies offer financial freedom from government censorship,
which is appealing to some people.
 The market for cryptocurrencies in India is largely driven by the value
accrual/investment perspective.
 Cryptocurrency tokens represent ownership of government assets in digital
form, while crypto tokens represent a small portion of the network-based
economy.

4. What is the Digital currency future?
These are some following points regarding the Digital currency future:
 The value of an asset or network is determined by the number of users and
institutions.
 CBDCs (central bank digital currencies) are similar to the rupee, digital rupee,
and e-rupee, but they differ in terms of custody of assets and the network.
 CBDCs are primarily being piloted for institutional purposes and wholesale
settlements in India, but the retail version could surpass UPI's reach and bring
immense strength to CBDCs.
 China is one of the earliest adopters of CBDCs and is already seeing benefits,
including being the dominant mode of value exchange in parts of Africa.
 CBDCs and networks like Bitcoin are vying for SWIFT users, while UPI is
competing with VISA and PayPal for market share in global transactions.
 UPI is currently being used most by MSMEs and retail sectors, but it could
also be used by top institutions and governments for significant payments.
 CBDCs are well-suited for this purpose because they offer compliance,
backing, regulation, and reconciliation.
 CBDCs could offer a more efficient and secure way for governments and
institutions to make large payments.
Also read: 10 Best Ways to Make Money with Digital Marketing

5. 5 Ways Digital Currency is Revolutionizing the
Financial World
These are the 5 ways digital currency is revolutionizing the financial world:
1. Cheaper and faster bank transfers
Today, it can take days or even weeks to send money internationally, but
new technologies like Ripple are changing that. Ripple's protocol allows
clients to transfer funds from one currency to another in seconds, using a
secure digital ledger. Ripple first finds the most efficient path between
trading partners, where the path might consist of a series of transactions
among foreign exchange traders who have accounts in a variety of banks.
Ripple then confirms all required transactions simultaneously.
This means that you can send money to your friend in Europe or Asia as
quickly as you can send an email. And it's much cheaper than traditional
international bank transfers.
Ripple is still under development, but it's already being used by some of
the world's largest banks. It's just a matter of time before Ripple becomes
the standard way to send money around the globe.

6. 2. Increase in global remittance
Migrants from developing countries send home more than $500 billion
every year, but high fees can eat into these vital funds. Technology,
however, has the potential to make remittances fast and cheap.
Virtual currencies, for example, could allow users to send money directly
to their families via mobile phone, with the only remaining fees being
those charged by currency exchanges. This is because digital currencies
don't require the same level of capital carrying costs as traditional money
transfer companies.
Lower costs could make it easier for smaller players to enter the market
and establish new remittance corridors, or for existing players to serve
smaller towns or new countries.
This means that migrants and their families could soon have more
affordable and convenient options for sending and receiving money.
3. Safe source of money for poor people

7. Africa has already shown that developing countries can lead when it
comes to sophisticated technology, with mobile money now used by
millions of people across the continent.
Digital currencies like Bitcoin could become another convenient and safe
form of payment in these countries, where most citizens don't have bank
accounts. While there is some currency risk, it could be better than the
existing options, particularly in high-inflation countries.
For example, Bitcoin is physically safer than storing cash at home or
buying gold jewellery. And it can be exchanged for a more stable currency
on global exchanges, giving even the unbanked a way to save and protect
against inflation. This could also make it harder for governments to
enforce capital controls. In short, digital currencies have the potential to
revolutionize financial inclusion and economic development in Africa.
4. Unleashing the full strength of eCommerce
Credit card fraud is a major concern for online merchants, and it can
prevent them from accepting international payments. Digital currencies
like Bitcoin can help to solve this problem, as transactions cannot be
reversed once they are made. This would allow merchants to sell
worldwide without the risk of fraud.

8. Digital currencies can also make online shopping smoother for customers.
Instead of having to enter their credit card information, customers can
simply send funds using their digital wallet. This could make it easier for
people in developing countries to participate in global e-commerce. Even
small transactions can be made more affordable with digital currencies,
as transaction fees are typically very low. This could enable new types of
online business models, such as low-value in-app purchases or micro-
payments for reading news articles.
5. Smart contracts and programmable money
Digital currencies can be used to create "programmable money" and
"smart contracts." This means that contracts can be written in code and
executed automatically when certain conditions are met.
For example, a smart contract could be used to automate an escrow
account. The buyer would deposit money into the contract, and it would
only be released to the seller when they hand over the title to the
property. This could be used for much smaller transactions than are
currently possible with traditional escrow accounts.
Smart contracts could also be used to prevent the theft of digital funds or
to ensure that money is not "lost" or stolen when it moves across borders
or between different organizations.
In addition, programmable money could be used to create much more
complex contracts, such as financial contracts involving multiple parties
and complex derivatives.
Conclusion

9. Digital currency infrastructure providers have a golden opportunity to grow their
businesses rapidly. However, they must work with regulators and comply with
regulations to ensure the long-term success of the industry and the economy.
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FAQs
1. What is the main difference between digital currency and
cryptocurrency?
The main difference between digital currency and cryptocurrency is that
cryptocurrency is a type of decentralized digital currency.
2. What are the main types of digital currencies?
There are 3 types of digital currencies:
• Cryptocurrency
• Stablecoins
• Central Bank Digital Currency (CBDC)
3. Where to buy digital currencies from?
You can buy digital currencies such as stablecoins and cryptocurrencies
from the world’s existing crypto exchanges.
4. What is the process of creating digital currencies?
CBDCs can only be created and authorized by the world government.
Private institutions can’t create CBDCs.