Article
The Impact of Digital Currencies on Global Financial Systems
The emergence of digital currencies—encompassing cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs)—is fundamentally reshaping global financial systems. This paper investigates the multidimensional impact of digital currencies on monetary policy transmission, cross-border payment efficiency, financial inclusion, banking sector stability, and regulatory governance. A mixed-methods research design was adopted, combining secondary data analysis from IMF, World Bank, BIS, and central bank reports with structured questionnaire responses from 60 financial sector professionals across banking, fintech, and regulatory institutions. Findings reveal that digital currencies significantly enhance payment system efficiency and financial inclusion while introducing systemic risks related to regulatory arbitrage, cybersecurity vulnerabilities, and monetary sovereignty challenges. CBDCs emerge as the most institutionally viable pathway for digital currency integration within existing financial frameworks. The study recommends coordinated international regulatory frameworks, phased CBDC implementation strategies, and digital literacy programs to realize the transformative potential of digital currencies while safeguarding financial stability.
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