DIGITALIZATION OF MONEY AND PROBABILITY OF CENTRAL BANK DIGITAL CURRENCY

Abstract

Monetary transactions between closely related individuals are simple and have very low costs. However, the internationalization of transactions increases both the time and financial costs of money transfers. The speed and cost of transactions have become important in the transition from commodity money to cryptocurrency. The development of the internet and technology has accelerated the transformation of money. When we look at the development of money, commodity money, coins, banknotes, paper money, representative currencies and finally cryptocurrencies draw attention respectively. In the digital money (cryptocurrency) age, the central bank’s digitalization and issuing its own digital money is one of the issues discussed. Algorithmic digital currencies such as Bitcoin seem to be suitable competitors for central bank price currency and their presence in the market forces central banks to pursue tighter monetary policy. This study examines the transformation of money and the central bank’s stance on digital money. The study concludes that monetary authorities should not remain insensitive to the financial movements that have developed in digitalization. The issuance of their digital currencies by central banks will reduce the cost of delay and enable them to keep pace with the developing technological age.