Trends And Developments In The Use Of Digital Currency

Money is a fundamental element of any economy, playing a crucial role in ensuring the smooth functioning of economic and commercial activities. Over time, money has undergone continuous evolution, adapting to the needs of society and technological advancements. The monetary system has constantly evolved, reaching its most recent stage of development the emergence of digital currencies. These represent an innovative category of financial instruments and include three main types: crypto-assets, stablecoins, and central bank digital currencies (CBDCs). Crypto-assets were the first to emerge on the market as decentralized alternatives to traditional financial systems. One of their main characteristics is high volatility, which makes them difficult to use as a stable means of payment. For this reason, stablecoins were developed to provide a more predictable value, being backed by assets such as fiat currencies, gold, or other financial instruments. Since control over the money supply is essential for a country’s economic policies, central authorities have initiated the development of central bank digital currencies (CBDCs). These are designed to combine the benefits of digitalization with the stability provided by national and international financial institutions. In some cases, CBDCs are developed exclusively by central banks, while other initiatives involve collaborations between multiple financial institutions to ensure an efficient and well-regulated implementation of these new forms of digital currency. Our paper discusses the evolution of crypto assets as well as some key aspects regarding central bank digital currency.