Theoretical fundamentals and practical aspects of the implementation and use of digital money

Abstract

The study is devoted to the analysis of the practice of using certain types of digital money and substantiation of the theoretical foundations of the mechanisms of use of digital money of central banks. It is determined that the process of digitization of money, which is based on the use of new algorithms, data channels, information sources, evaluation and decision criteria, is a new stage in the development of banking and payment systems, central banks, national monetary systems and, in general, the entire monetary and financial system of the world. The shortcomings of the use of cryptocurrencies, the peculiarities of the functioning of unregulated digital markets that arise from their use are described, and the risks that cryptocurrencies may pose to national monetary and financial systems are identified. Calculations were made and a close correlation was found between the value of the NASDAQ 100 stock index and the price of bitcoin. Based on the analysis of the essence of digital money of central banks, organizational and technical approaches to their design, production and use, the objectivity of the process of their introduction is proved, the advantages and disadvantages of the new form of money are described, the mechanisms of transition from private to digital money is proposed. The main problems that hinder the process of introduction of digital money by central banks are identified and characterized. It has been proved that the introduction of digital money by central banks is the basis of the country's monetary sovereignty and an important tool for implementing economic and social policy. It is substantiated that the use of digital money of central banks will contribute to the transformation of fiscal and tax policy implementation mechanisms, financial monitoring system, monetary transmission channels, significant changes in the structure and functions of commercial and central banks, and strengthen the role of fintech companies in payment systems and financial markets.