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The Importance of Implementing Digital Currency to Fix Economic Issues

Introduction

Although there is the profound use of traditional fiat currencies to date, digital currencies have existed since the 1990s. Their unique and distinguishing features suggest that digital currencies can help solve most of the prevailing economic issues. Gale Opposing Viewpoints Online Collection outlines in a relative article that digital currencies rely on decentralized peer-to-peer technology and include digital tokens such as Bitcoin and Ethereum (The Australian). Digital currencies are not regulated by any government (The Guardian-London, England), increasing the risk of money laundering and other criminal activities. Despite such shortcomings, introducing digital currency is a goldmine since implementing digital currency offers an ideal and efficient solution for fixing and solving most of the prevailing economic issues.

Increasing Efficiency in Cross-Border Payments

Implementing digital currency increases the efficiency of cross-border payment and relative transactions, thus solving and fixing economic issues related to and arising from inefficient cross-border payment(s).  For a long, cross-border payment has been facilitated through traditional fiat currencies like the British Pound, United States Dollar, the Euro as well as the Indian Rupee, among others, until the recent introduction of digital currencies such as Bitcoin (Daily Telegraph-London, England), Ethereum, Ripple, and Litecoin. It is worth noting that cross-border payments, among other traditional fiat currencies, take longer than cross-border payments through digital currencies. Traditional-fiat-currency-enabled cross-border payments are settled in a period ranging from one business day to five business days. 

Such indicates the extended settlement period of cross-border payments through traditional fiat currencies, often due to various vital requirements. For instance, the involved banks require human verification of the individuals in a particular transaction to curb money laundering and other financial-criminal activities. To curb criminal financial activities such as money laundering and embezzlement, banks require all cross-border payments to be scrutinized for a specific period. This increases the settlement period of fiat-enabled cross-border payments, thus resulting in a slow settlement speed. Collectively, traditional fiat currencies trigger various economic issues in line with cross-border payments, such as the slow settlement speed and long settlement period that illustrates the inefficiency of cross-border payments.

However, the rise, introduction, and existence of digital currencies provide a lasting solution to the economic issues of cross-border payment arising from traditional fiat currencies.  Digital currencies use decentralized ledgers (Gale Opposing Viewpoints Online Collection), which help shorten the processing speed of all cross-border payments.  The decentralized ledgers enable the rapid processing of cross-border payments. As a result, digital currency-enabled cross-border payments and transactions are settled within a short time, either in a matter of seconds or less than an hour. Such illustrates not only a fast settlement speed of cross-border payment but also an increase in cross-border payment efficiency, which tends to solve and fix the resultant economic issues arising from the slow settlement of cross-border payments.  By reducing the settlement period and increasing the settlement speed and efficiency of cross-border payments, implementing digital currency is an ideal solution for fixing the prevailing economic issues.

Fast and Efficient Government Payments

Implementing digital currency will also help solve the resultant economic issue that relates to and arises from the slow processing of government payments. As Rodeck(np) enlightens in a relative article, it takes longer for the government to make and send payments such as child benefits, food stamps, and tax refunds. A good example is tax refunds in the United States, where the United States Federal government processes the tax refunds in three weeks. Supportively, the United States Internal Revenue Service (IRS) accepts tax return requests in 24 to 48 hours and later takes 21 days to process and issue...