MONETARY CIRCULATION IN THE ERA OF DIGITAL INNOVATION: PROSPECTS OF ELECTRONIC AND VIRTUAL CURRENCIES

Abstract

The article is devoted to the study of the impact of digital innovations on the transformation of modern monetary circulation, in particular through the introduction of digital currencies, which are capable of radically changing the financial system. The aim of the work is to study the potential of digital currencies in the context of increasing the efficiency of financial transactions, expanding access to financial services and improving the stability of the economy. The topic is relevant, since digital technologies are rapidly developing, forming new opportunities for managing cash flows, which is important for both national economies and the global market. The study uses a comprehensive approach that combines methods of analysis and synthesis. The author assesses the prospects for integrating digital currencies into financial systems, analyzes their functional capabilities and risks arising in the process of digitalization. The results obtained confirm that digital currencies have great potential for improving financial systems. At the same time, a number of risks have been identified, including regulatory difficulties, in particular the need to create a legislative framework for integrating digital currencies into national economies. There are also threats of excessive centralization, which can lead to the loss of financial independence of commercial banks, and privacy issues, since digital currencies can track every transaction. The practical value of the article lies in the possibility of applying the conclusions obtained to develop national strategies for the implementation of digital currencies and the adaptation of financial systems to the conditions of digitalization. The results can be used by governments, regulatory authorities and financial institutions to create effective mechanisms for the integration of digital currencies, which will contribute to their harmonious implementation without harming economic stability. In addition, the data obtained are important for business and the innovation sector, which can take advantage of the new opportunities opened up by digital currencies to expand access to financial services and reduce transaction costs. This research serves as the basis for further scientific research and practical developments in the field of digital finance.