Digital currencies: the technology adoption vs. policy implications

The study examines the evolving terrain of digital currencies, delving into the factors contributing to expansion and the diverse regulatory approaches across different geographical regions. The rapid growth of the digital currency industry can be attributed to the technology advancements, increased financial inclusivity, rising investor enthusiasm, globalisation, economic instability and the growing applications of blockchain technology. Whereas, the policymakers are confronted with a range of challenges, encompassing the necessity for synchronised regulatory frameworks, safeguarding the consumer interests as well as the acceptability of digital currencies in global trade. The proposition of cross-border collaboration has been put forth as a strategy to effectively tackle the difficulties of international trade. This paper thoroughly examines the factors driving digital currencies towards widespread adoption in the financial sector, as well as the changing regulatory environment surrounding Central Bank Digital Currencies (CBDCs). Policy recommendations and implications have been drawn from the perspective of different stakeholders.

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