The most significant advantage of the digital currency is that it will allow people to transfer their money much faster. As we all know, it takes pretty much time for banks to move money from one bank to another. Digital currency can be moved in no time. Moreover, people will have a round-the-clock access to this new type of money and make transactions any time they want, not depending on the working hours of a bank and the day of the week.

However, there are some not less obvious disadvantages of the digital currency. Firstly, it is very difficult to realize this idea in such a way that people could make money transfers offline. Secondly, CBDS is still only hypothetical. If the idea is realized, computers will have to solve complex equations to verify and record transactions. This takes considerable electricity and gets more expensive as there are more transactions. Finally, nobody knows yet if the digital currency will behave like cryptocurrency: will it be able to lose 20% of its value in one day or not?

All in all, despite all the disadvantages, today at least 80% of central banks are researching this technology. Remember how fast the internet has become an essential part of our lives. Thus, I can definitely say that we should expect the appearance of the CBDC in the nearest future.    

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First of all, it is impossible to track the transfer of digital currency from one wallet to another. Also, it is impossible to stop this transfer so that if it was send, nobody could intercept it. The encryption method can be described of as a black box that accepts a semantic message as input and converts it into a messy noise that contains almost no information about the original message. Secondly, it is really hard to steal digital currency from the wallet because it have a high level of protection. As a user of the most common wallet, I can say that to withdraw money you need two confirmations via email and mobile phone and also you need to write a list of twelve words in a special order. If all you money is on HDD, you have only ten attempts to guess password and if all of them are incorrect, HDD destroys. 

However, everything have another site. Their biggest disadvantage of digital currency is their volatility. They all connected to USD and their exchange rate changes every minute. Also, some people use digital currency to steal money. A lot of people don’t know how this works so that they are a target for scammers.

If to talk about the question, I want to say that digital currency have some opportunities for future development, for example, it can be used as an online payment method. Recently, Salvador made Bitcoin as an official currency of the country and some countries are already discussing about doing the same. However, it is impossible to use it as one currency for all countries because of its high volatility and connection to USD. In fact, all digital currency is just speculative thing for traders. 


Links: 
https://postnauka.ru/talks/82275

 

There are quite many advantages of electronic currency. Firstly, digital money allow you to make payments faster than present payment systems, it also becomes less costly to make different transactions, because fees aren’t as high as they are today. Secondly, at any time transactions at the same speed, as with digital currency there is no need to wait for the confirmation of transaction from the bank. 

 

However, there are several disadvantages. First of all, even if physical wallet isn’t required to store digital money, you need at least secured Internet connection to use money you have. Moreover, digital currency is quite vulnerable to hacking and hackers can the money you have from your online wallet. 

 

To sum up, I personally think that despite the disadvantages CBDC may become real in next few years. 

 

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In my opinion, people need more time to understand the benefits of using digital currency, but this money is the future of our world. To begin with, if you want to buy something expensive, for example a new car, you can make a transaction immediately with digital money unlike cash, for which you have to spend time to get. In addition, you do not need to pay a fee for using your own digital currency in contrast with other money. 

However, there are some cons to using digital currency. Firstly, it is very risky. You never know how the price of coins will change, it can go down extremely fast and you will lose your money. Secondly, from the above point we understand that a person need to study a lot to learn how to manage this type of money. 

In conclusion, although there are pros and cons of using digital currency, I still believe that this money will development very quickly in the near future and after a while, we will give up cash. 

Sources: 

https://www.prescouter.com/2019/11/disadvantages-of-cryptocurrencies/ 

Сentral bank digital currency (CBDC) has the edge over cash and non-cash currencies. First of all, it is more secure. It is much more difficult to steal money when it is assigned by a centralized system to one person. Besides, CBDC is available everywhere so you can use it at any time. Transfer operations are faster and the tariffs for their implementation are lower.  

In addition to all of the above, digital currency is characterized by transparency of payments. It gives a large amount of information about users to the central bank. This can be dangerous, as it can increase state control. It may cause mistrust by citizens, which will make it difficult to roll out the system. 

To sum up, CBDC will be a good alternative to current currencies. There are still many stages of work, such as drafting legislation and testing on pilot groups, but If there are no serious problems, it may soon appear in our lives.

Sources:
https://podcasts.google.com/feed/aHR0cHM6Ly9yc3Muc2ltcGxlY2FzdC5jb20vcG9kY2FzdHMvMTEwMDkvcnNz/episode/OTVkZGUwZjktMTk1Yi00ZGRjLTlmNTctOTYxOGE5NTM5MGY5?sa=X&ved=0CAUQkfYCahcKEwi41erDwfXyAhUAAAAAHQAAAAAQAQ
https://cbr.ru/StaticHtml/File/112957/Consultation_Paper_201013.pdf

 One of the interesting features of CBDC is that the Central Bank can have direct access to the database of transactions of some persons and the ability to encrypt the data of others while maintaining their confidentiality. In this way, the central bank can track the correct spending of public money while protecting the data of individuals. In addition, direct access to all persons (no commercial banks in between) allows for more efficient money supply management that improves monetary policy.

But there are some risks of using CBDC.
First of all, the central bank can abuse access to transactions, neglecting the privacy of users. Secondly, it is very expensive.So, digital currency demands powerful servers, keeping of which brings great regular costs.

Despite the risks, I am sure we will see the CBDC soon, and I hope that the Central Bank will pursue a transparent policy that allows us to use all advantages of the digital currency.

^{https://en.wikipedia.org/wiki/Central_bank_digital_currency}

 

One of the most significant benefits is efficiency. All money transactions, payments are made by only two participants. It means that there is no need for banks or clearing houses and transactions is absolutely direct from the payer to the payee. It makes transfers easier, faster and more reliable. Another advantage is preventing illegal activity. By CBDC the government can track the exact location of every unit of the currency. It allows to spot criminal activity, collect all taxes and makes offshore banking an unreported employment impossible for hiding finances from the CB or government.  

 

Nonetheless, there are risks associated with CBDC. Firstly, central bank digital currencies are centralized, so the controllers of CBDC can add or remove money from anyone’s wallet. The citizens cannot be really sure that nobody from the management will steal their money. But the problem can be solved by decentralization of the system. Another drawback is dollarization.  A well-run foreign digital currency could become replacement for a local currency. 

 

To sum up, Central Bank digital currency is convenient and reliable system. Personally, I suppose that there are more advantages that disadvantages. Moreover, most of disadvantages can be solved. It makes me believe that Central Bank digital currency is practicable in the near future. 

Sources:
https://en.wikipedia.org/wiki/Central_bank_digital_currency#Benefits_and_impacts

 

 

To answer this question, we need to take a closer look at the pros and cons of the cryptocurrency. The first country to digitalize its currency was China: unveiled in 2019, the Digital Currency Electronic Payment began its trial in April 2020 and has been slowly rolled out in major cities including Shanghai, Chengdu and Beijing. The cautious introduction of digital currency makes it evident that  the Chinese government is taking the DCEP project very seriously. Now we can observe the most significant pros of this decision: firstly, the long-term potential of the digital yuan will be its ability to subvert the power of the American dollar. Furthermore, digital wallets don’t require an internet connection to be accessed via smart phone. Other significant advantages of the cryptocurrency are its flexibility and transparency. Finally, the system offers rich potential for economic expansion, but the future plans for the internationalisation of the digital currency rely on how the domestic market adapts.

But still there are some drawbacks of cryptocurrency: it cannot compete with on the same level as players like VISA and Mastercard in terms of the speed of transaction; cryptocurrencies will be subject to cybersecurity breaches, and may fall into the hands of hackers, which is a significant disadvantage; price volatility, tied to a lack in inherent value is a big issue too; finally, there will be increased risk in investing in this technology.

There are a lot of countries which have already legalized the cryptocurrency: all countries of the EU, the countries of G7 etc. In my viewpoint, despite all the drawbacks the cryptocurrency is likely to be implemented into financial systems of different countries by the Central banks. But it is a matter of time: countries have a long way to go before the cryptocurrency is finally put into circulation.

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Let’s start with disadvantages. The most problem of this event it is weakening of the strength of monetary policy. It will hard to Government fight with volatility of business cycles. We will have all or nothing (I exaggerated, but the meaning is clear). Also, we lost stability in current, because crypto currency is high volatility and those, which will reflect dollar rate, will fall with dollar, because dollar will lose demand. And last but not least, some digital currency hasn’t record of people’s transactions and it will simplify money lauding, drags selling and other criminal activities.

On the other hand, transactions in digital currency are faster, cheaper and don’t have weekends and holidays. They don’t have barrier on transnational transactions. It can speed up the economy. 

Сrypto currency was created as currency, where impossible to track a transaction. But in my opinion, it doesn’t will be in the future, because it doesn’t need for governments due to reason was writing above and in other homeworks of my classmates. I figure that the future of crypto currency – is transformation in fast and cheap analogue of bank deposit with usable service.