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    • DOI: 10.18178/JOEBM
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HOME > Archive > 2025 > Volume 13 Number 1 (2025) >
JOEBM 2025 Vol.13(1): 86-91
DOI: 10.18178/joebm.2025.13.1.850

The Impact of Digital Currencies on the International Monetary System

Wang Xiang
International Business, Faculty of Economics, Nanjing Audit University, Nanjing, China
Email: 756159106@qq.com (W.X.)

Manuscript received July 19, 2024; revised August 28, 2024; accepted November 2, 2024; published February 20, 2025.

Abstract—Digital currency, as a frontier innovation of fintech, is gradually infiltrating into all levels of the global financial system, and has had a profound impact on the international monetary system. This paper explores in-depth the characteristics of the currency, development of digital currencies and their potential impact on the international monetary system, aiming to provide a comprehensive perspective and in-depth insight for policy makers, financial regulators and academia. Digital currency, based on blockchain technology and cryptographic algorithm, has the characteristics of decentralization, high security and low transaction costs, and has been classified as cryptocurrency, stablecoin and central bank digital currency. These characteristics not only pose new challenges to the formulation and implementation of monetary policy, but also bring about changes to cross-border payments, financial stability and the global economic structure. In terms of monetary policy, digital currency may weaken the central bank’s ability to control the money supply and change the adaptability and effect of monetary policy tools. In the field of cross-border payment, the application of digital currency has improved payment efficiency and reduced costs, causing an impact on the traditional exchange rate mechanism and cross-border payment system. The volatility of the digital currency market has also brought new challenges to financial stability, especially in the areas of systemic risk assessment, anti-money laundering and anti-terrorism financing, which requires the joint efforts and cooperation of the international community. The impact of digital currencies on the structure of the global economy is also significant. They could trigger changes in the global reserve currency system, change the pattern of international trade and investment, and provide new development opportunities for developing countries, but also bring a series of challenges. The widespread application and increased acceptance of digital currencies will drive the global economy to a more efficient and transparent direction. This paper demonstrates the potential and challenges of digital currency in real financial activities. In terms of policy recommendations and future prospects, this paper proposes the necessity of international cooperation and regulatory framework construction, emphasizes the importance of digital currency regulatory policy, and predicts the potential trend of digital currency development.

Keywords—digital currency, cryptocurrency, digital currency of the central bank, international monetary system, and financial regulation

Cite: Wang Xiang, "The Impact of Digital Currencies on the International Monetary System," Journal of Economics, Business and Management, vol. 13, no. 1, pp. 86-91, 2025.

Copyright © 2025 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

 

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