Digital Currencies in The New Global World Order

The chapter analyses the most relevant literature on the book’s topic, giving different views on the subject. The main tool for literature review is the Mendelay.com platform. The topic regarding implementation of the digital currencies in international trade evolved dynamically in the literature recently. The period of the literature review in this chapter covers 2019–2023. Using the Mendeley.com platform for keywords, “Global Trade digital currencies” was the outcome of 332 relevant publications found on the Mendeley platform in 2014–2023, but 290 were published after 2019 and 206 of them were published in 2020. That is why the author decided to focus on the period 2019–2023.

Central banks around the world are exploring concepts of different forms of digital central bank money. They are proceeding with their investigations at different speeds and for different motives. While some central banks are only analysing the need for digital central bank money and its potential advantages and disadvantages for the time being, other central banks have already started developing the prototypes. Digital central bank money would be another form of money issued by a central bank and a direct liability of the central bank, in addition to cash and credit balances of licensed institutions at the central bank. Most central bank projects are aimed at digital central bank money that would be available to private households, companies and other non-banks. The Eurosystem is also currently discussing and examining the possible issuance of digital central bank money for the euro area—the digital euro. A digital euro would provide another payment method to choose from in the euro area. Therefore, a digital euro should be designed to meet the needs of the population. This raises a whole series of interesting questions, not least given the current investigation phase: How do private individuals currently assess a possible digital euro? What needs could it satisfy? Could it be designed as a kind of digital cash? Could it conceivably compete with traditional non-cash payment instruments? What factors could ultimately influence its acceptance and use by consumers? Against this background, this paper deals with what answers to the above questions are given in German society. In addition, a question was raised about the impact of the digital euro on Germany’s international trade.

For years, the European Central Bank has analysed the potential of broadening the monetary basis in European economies through its Digital Euro project. It regards a Digital monetary anchor also as a countermeasure against declining public demand for cash in most Euro area countries that impedes the transmission of monetary policy and has the potential to harm financial system stability. The article provides a brief overview of the historic Digital Euro project development, introduces the current project status and European directive draft on the Digital Euro and evaluates project results made from an economic perspective.

This book chapter thoroughly investigates the discourse on digital currencies, focussing on virtual currencies like Bitcoin and their implications for international trade. The study emphasizes the necessity to explore the domestic aspects of payment intermediation and how these influence the integration of digital currencies into international trade, given the shift towards technological advancements and declining cash transactions. The competitive relationship between digital currencies and traditional money is analysed, highlighting their challenges to governmental oversight. The research explores numerous factors, including trust, credibility, volatility, and the impact of geographic and cultural elements on trade. It also considers the potential disruption to established economic systems and the central bank’s role as a lender of last resort. The study employs a balanced approach to assess the opportunities and threats presented by digital currencies and concludes with a varied outlook based on the weights assigned to these factors. The findings highlight the need for informed decision-making in digital currency transactions and contribute to the broader understanding of their integration into the international financial system. The chapter enriches the discourse on digital currencies by analysing their role in trade and the evolving payment processing landscape.

Most central banks have started work on the introduction of central bank digital currencies (CBDCs). CBDCs might however be seen as one of the possible tools in the international competition between global trade leaders. This means that the political risks connected with the implementation of CBDCs grow in importance since political issues associated with the CBDCs’ implementation will impact the efficiency of CBDCs usage in the international trade context. At the same time, central banks endorse CBDC as a purely economic project, whose goal is to provide the digital equivalent of cash increasing financial inclusion and the efficacy of the financial system and economy. This contrast highlights the necessity to assess the political opportunities (and their importance) of CBDCs, also from the point of view of global trade. The chapter aims to show the political potential of CBDCs. For that purpose, the most important political opportunities and dangers that relate to CBDCs are presented. The results of the survey are then analyzed in the context of real political risks of CBDCs’ implementation and their significance for international trade.

This research investigates how the distribution of monitoring assets is impacted not only by the choice of digital currencies, but also by several hypothetical situations, such as those relating to the introduction of digital currencies by central banks (CBDCs). Digital currencies, which have recently witnessed a proliferation of design options, are considered to be a factor challenging established financial systems and may affect the way these systems are now regulated. Recently, there has been a proliferation of design options for digital currencies. This paper provides an overview of previously and recently proposed research regarding digital currencies. The theoretical framework used for this paper is to understand the concept of digital currencies and try to explain aspects related to digital currencies. Most of the previous research regarding digital currencies is still relevant to understanding the concept of digital currencies, but scholars need to be knowledgeable about recent research regarding digital currencies. Due to frictions in international monetary systems, it may not be easy to obtain an agreement on a particular course of action. Prudential regulation and supervision would be entity-neutral if they adhered to the principle of “same-risk, same activity, same treatment. The use of digital currencies enables quick transfers and reduces the amount of time needed for transactions. Because transactions involving digital currencies are conducted in a virtual setting, there is no need for the actual production of anything tangible to take place. Compared to traditional transaction methods, the use of digital currencies results in significantly reduced fees associated with global trade.

This chapter highlights the swift expansion of digital payments, with China leading in cumulative transaction value and India’s Unified Payment Interface (UPI) changing the nation's payment landscape. Central Bank Digital Currencies (CBDCs) have appeared as a global trend, with different issuance models and numerous countries vigorously exploring or launching their CBDCs. Additionally, this chapter explores the multifaceted effects of digital currencies. These digital currencies aim to improve financial system efficiency and secure transactions. The impact on financial stability is a crucial consideration, as CBDCs offer central banks new tools for managing monetary policy and systemic risk, compelling careful regulation. Digital currency, encompassing CBDCs and cryptocurrencies, also holds promise for financial inclusion by providing accessible financial services and addressing barriers to both demand and supply. Furthermore, digital currency simplifies international trade, benefiting small and medium-sized enterprises and reducing currency exchange risks.

Digital currencies have been gaining popularity all over the world for several years. This chapter deals with various aspects of digital currencies including their evolution, types, and positive and negative dimensions. This is a descriptive study, which aims to discuss the potential benefits of digital currencies and their impact on international trade and the economic growth of the Indian economy. Secondary data taken from various reliable sources such as the Reserve Bank of India (RBI) official website including RBI press releases 2022–2023, Digidhan Dashboard of Government of India, and Statista Market Insights (Digital Payments—Worldwide) data are used in the study to show the growth of digital transactions and its value over the years from 2017 to 2022. The study shows that although the use of digital currencies is beneficial for the development of international trade and the economic growth of a nation, several challenges associated with the use of digital currencies need to be addressed to drain out its full potential.

The Central Bank digital equivalent of fiat currency supported by the government is called Central Bank digital currency (CBDC). This type of digital currency is promulgated by the “central bank of any country”, which is associated with the national currency. The same would apply to India's “digital rupee”, which will be supported by RBI, the country's central bank. At present more than a hundred countries worldwide are working on developing CBDCs, which are in varying stages. Though CBDC is predominantly persuaded by “bitcoin”, the perception of CBDCs is distinguished from decentralised “virtual currencies” as well as “crypto assets”, those were neither disseminated by the union nor having the dignity of “legal tender”. This present study clarifies the concept of digital money, its differences with “cryptocurrencies”, the reason behind the recent boom in acceptance theoretically and its importance in international trade.

e-Rupee (e) is the new digital currency proposed by the Indian banking authority in the form of Central Bank Digital Currency (CBDC) for its domestic use. Currently, this is in the trial stage and about to launch across the country specifically for trading purposes. This decade has observed the launch of digital transactions and is enjoying hassle-free transactions both for trading and purchase. Under such circumstances, the entry of the e-rupee for trading will revolutionize the trading process provided the perceived value is imbibed well. The current study is an attempt to test the influence of attitudes regarding the e-Rupee towards the intention of adopting e-Rupee among the traders. 327 traders have expressed their opinions through a structured questionnaire. The result indicates a profound connection between attitude and intention of adopting e-Rupee. Further individual reasons, i.e. technical knowledge and Fear of failure also observed to have a significant impact on the intention of adopting e-rupee.

This paper presents a concise overview of the current scenario of Central Bank Digital Currencies (CBDCs) and delves into their historical context. It traces the evolution of money, transitioning from commodity money (e.g., Gold) to paper currency, and explores the pivotal functions that money serves within economies. Additionally, it scrutinizes the implications of modern digital currencies on various facets, including economic systems, foreign exchange markets, international trade, and the global economy at large. One of the paper’s central focuses is the issuance of central currencies, with particular attention directed toward the Reserve Bank of India (RBI). It scrutinizes how CBDCs are envisioned to function and evaluates their potential ramifications for global trade dynamics. Furthermore, the paper underscores the critical role of digital infrastructure in implementing this technology while also highlighting its inherent limitations. In addressing these constraints, the paper delves into potential strategies and solutions, offering insights into how the RBI can navigate the multifaceted landscape of CBDCs.

Overall, this paper comprehensively examines CBDCs, contextualizing their emergence in the broader evolution of monetary systems. It elucidates their potential impact on economies and international trade while acknowledging the technological and operational challenges associated with their implementation. A specific focus on the RBI's role and considerations aims to contribute to the ongoing discourse on the future of digital currencies and their role in shaping the global financial landscape.

In 2022, the World Economic Forum claimed that Digital Currencies could revolutionize global trade in future. As the world hurtles into the digital age, the financial landscape is undergoing a transformative shift with the rise of digital currencies. The emergence of cryptocurrencies and central bank digital currencies has sparked a new era of international competition, reshaping the way nations conduct transactions, manage their economies, and interact on the global stage. Digital currencies of several countries will compete with specific economic and technical characteristics for shares in trade and financial markets. The paper analyses the potential of currency system shifts from Dollar dominance toward a new multipolar regime. Based on monetary theory as well as current empirical research, it considers chances and risks associated with digital currency competition among leading central bank currencies but also with private digital currency forms and outlines prospective development paths of their use in global trade.

Digital currencies, often referred to as cryptocurrencies, have emerged as a disruptive force in the world’s financial system. This study examines the significant effects that digital currencies will have on the development of international trade and economic growth. These cutting-edge financial instruments are reshaping the traditional dynamics of global trade and fostering economic growth as they gain increasing popularity. The study begins by elucidating the foundational concepts underlying digital currencies, with a specific focus on their impact on international trade and economic growth. In addition to fostering a decentralised financial environment, this technological revolution has opened up new possibilities for secure and efficient cross-border transactions.The study explores numerous important aspects of institutional attitudes towards digital currencies. It also examines the concept of Central Bank Digital Currency (CBDC). Furthermore, the study delves into potential ways digital currencies could change international trade. For example, by enabling disadvantaged communities and smaller firms to engage in international trade without relying on conventional banking infrastructure, it may be possible to promote economic growth on a global scale. The study investigates the regulatory opportunities and problems involved with the introduction of digital currencies to evaluate their effects on national economies. Globally, policymakers and central banks are grappling with how to balance encouraging innovation with preserving financial security and stability. Additionally, the study examines the potential impact of digital currencies on economic growth. In summary, this study highlights how digital currencies have the power to redefine international trade and spur economic growth. Policymakers and stakeholders must negotiate the regulatory environment as digital currencies continue to develop to take advantage of their advantages while minimising dangers. This study provides a foundation for wise decision-making in the dynamic world of digital currencies and international trade as well as sheds light on the financial revolution that is currently taking place.

The impact of digital payments on job creation and employment opportunities in India has been significant. It has played a crucial role in boosting employment rates and fostering economic growth in India. This study examines the relationship between digital payments and economic growth in India using quarterly data from 2011–12 to 2022–23. To determine the outcomes, the study employed an ARDL cointegration-bound testing approach. It has been found that the use of card payments and retail electronic payments has a favorable effect on India's economic growth. Prepaid payment methods and Retail electronic payments, however, have less of an impact on India’s economic progress. As a result, this study emphasizes the importance of card payments and retail electronic payments as a driving force behind India’s economic growth.

Technological enhancements have spurred central banks worldwide to explore the potential of the emergence of digital currencies. Reserve Bank of India (RBI) is one of the most renowned central banks in the world and has made steps toward creating and implementing a sovereign digital currency. RBI provides a secure, efficient, and open trading platform for the digital Rupee. The digital Rupee’s purpose is to use blockchain and other cutting-edge technology to facilitate cross-border transactions by accelerating settlement times and removing the drawbacks of traditional payment systems. Due to its real-time settlement capabilities, digital currency is predicted to boost the overall effectiveness of international trade. This chapter explains the significance of the RBI's digital currency in international trade, potential risks and challenges, compares and contrasts Central Bank Digital Currencies (CBDCs) with current digital currencies, and analyzes and extrapolates from international CBDC experiments. This study will be helpful for scholars, policymakers, financial institution managers, the government, and regulatory bodies, offering valuable insights for informed decision-making and strategic planning.

This research investigates the transformative landscape of Central Bank Digital Currencies (CBDCs) and their profound impact on global trade. The overarching aim is to comprehensively analyze the significance of CBDCs in fostering financial inclusion, driving economic growth, and reshaping international trade dynamics. The methodological approach involves an in-depth examination of existing CBDC initiatives worldwide, with a focus on case studies such as China's e-CNY, The Bahamas’ Sand Dollar, and Nigeria's e-Naira. By scrutinizing these implementations, the study aims to extract valuable insights into the diverse strategies and impacts of CBDC adoption. The research identifies key values added by CBDCs in the context of global trade. Foremost, CBDCs offer the potential to streamline cross-border transactions, reducing costs and enhancing efficiency. Their role in providing a transparent, traceable platform addresses challenges related to anti-money laundering (AML) and counter-terrorism financing (CTF) risks, thereby contributing to a secure global financial ecosystem. A notable contribution is the enhancement of credit information for trade finance, enabling a more informed evaluation of the creditworthiness of businesses engaged in international transactions. To achieve the full realization of CBDC benefits in global trade, the study underscores the importance of factors such as interoperability, regulatory support, competition with other digital currencies, and widespread adoption by businesses and individuals. By synthesizing these aspects, the research aims to provide a comprehensive understanding of CBDCs’ transformative potential in global trade. Staying attuned to the evolving digital currency landscape is emphasized as crucial for stakeholders seeking to grasp the nuanced implications of CBDCs on the future of international trade.

The amalgamation of digital currencies and international trade has initiated a paradigm shift, fundamentally altering the dynamics of cross-border transactions. This extensive research study examines the complex relationship between digital currencies and international trade, investigating the various opportunities along with the obstacles. A comprehensive analysis of empirical evidence and case studies have been included to demonstrate the positive impact of digital currencies on cross-border transactions. Specifically, the findings highlight the enhanced efficiency, cost reduction, promotion of financial inclusion, and facilitation of transparency and traceability in trade that digital currencies offer. Nevertheless, the presence of regulatory intricacies, apprehensions over security, possible disturbances to established financial systems, consequences for economic and financial stability, and the volatility of exchange rates pose significant obstacles. This research highlights the importance of establishing cohesive regulatory frameworks, implementing effective risk management methods, and adopting a proactive stance to effectively navigate the dynamic nature of digital currencies in the realm of global commerce. A fundamental framework has been proposed for understanding and addressing the emerging opportunities and problems in the realm of global commerce as a transformation of the ongoing digital currency revolution.

Central Bank Digital Currency (CBDC) is vital for enhancing cross-border payment efficiency in the digital age. This study aims to determine how CBDC can improve the system’s effectiveness for making payments across international borders. This paper explores the benefits of CBDC to enhance cross-border payment processes. Implementing CBDCs in cross-border payment systems can alleviate privacy, data safeguards, transparency, and security concerns. Key insights and lessons from various cross-border projects are elaborated, providing future directions for the cross-border CBDC projects. This study also discusses policy recommendations that can be implemented to make the most of CBDCs’ benefits in cross-border payment systems.