Cryptocurrency is leading the Financial world now. It is already on the way to become the perfect alternative to the traditional fiat currency. Now, the countries are going to develop their Digital currencies and want to take back the flow of money into their own hands. As Cryptocurrency is totally decentralized, they are wanting to give their citizens an alternate option that is quite similar to Cryptocurrency but will be a centralized one.
What are Digital currencies?
Consider a currency that has no physical appearance and only exists on a digital or electronic medium. Yes, that is typically a Digital currency. It does not exist in the real world. This virtual form of currency has some other names too.
- Cybercash.
- Electronic currency.
- Electronic cash.
- Digital money.
Some Key Features of Digital currencies
Here are some features of Digital currencies
- As Digital currency only exists in electronic form, you need to access them through your computer or mobile.
- The absence of any intermediates makes Digital currency cheaper than trade currencies.
- Have you heard of Cryptocurrency? Yes, they also fall under the umbrella of Digital currency. All Cryptocurrencies are definitely Digital currencies, but not all Digital currencies are Cryptocurrency.
- Unlike Cryptocurrency, Digital currency is stable, and it is traded with the market. At the same time, Cryptocurrency is driven by consumer sentiment.
Some Countries That Have Adopted the Concept of Digital currency
Here is the list of governments that already have adopted Digital currency or planning to develop one.
- The USA.
- The UK.
- India.
- China.
- Japan.
- The Netherlands.
- Denmark.
- Ecuador.
- Switzerland.
- Russia.
- Sweden.
- Canada.
And many more to come in 2021. You can visit the image below to get some detailed information
Why Countries Are Going All Out to Develop Their Digital currencies
With the rising demands of Cryptocurrencies, countries or governments are thinking of developing Digital currencies. Cryptocurrencies have some useful features that are able to handle some challenging financial situations. With the same concept and features, countries are willing to build their own digital currencies that will have the same features, but a central committee will regulate them. In short, governments are ready to build centralized Digital currencies.
Here are the reasons, why countries are going to develop their Digital currencies.
1. Inflation
In order to fight inflation, there is no other option that is more reliable than Cryptocurrency. Inflation is a financial problem that has been faced or being faced by almost every country. As the number of Cryptocurrencies is limited, there is no chance of inflation. This concept will allow the government to handle the financial challenges with Digital currencies.
2. Convenient
Digital currencies are much more convenient than fiat currency. As Digital currency does not have any physical appearance, it only can be stored in your electronic gadgets, like computers, mobiles, or tabloids.
This feature makes it more convenient than any other form of currency or fiat currency. In this digital world with rapid digitalization, Digital currency can bring a solution to many of the problems.
3. Rise in Digital Trends
With the increasing value price of Cryptocurrency, more citizens and merchants are becoming members of the Crypto world. Many retailers are doing business with Bitcoin and other Cryptocurrencies and accepting payments with them.
As Cryptocurrency or Bitcoin is fully decentralized, the Government has no authority to regulate the flow of these currencies. With the launch of centralized Digital currency, the Government will be able to track the flow of currencies and manage the financial flow of a country.
4. Cross Border Transactions
Cryptocurrency is also very popular in the cross-border transactions. Cryptocurrency allows making cross border or international payments in a more convenient and faster process. People prefer Cryptocurrency more than traditional bank transactions.
With Digital currency, the government will also be able to make international or cross-border transactions with more enhanced speed and convenience.
5. Boost Financial Standing
All these factors will work together in favour of the countries or government and will help to enhance the financial status of a country. As this will be a centralized version of virtual currency, the government can keep track of the cash flow and also secure the financial situation with more grip.
Conclusion
Cryptocurrency has developed a challenge for fiat currency in many aspects. Experts are addressing Cryptocurrency as the perfect alternative to traditional fiat currency. All the factors that are mentioned earlier are making the countries aggressive to develop their Digital currency.