THE FUTURE: FIAT CURRENCIES OR CRYPTOCURRENCIES

Abstract

This report attempts to look into the future of the global monetary system. The history and development of fiat currencies is reviewed, their strengths and weaknesses are presented, causing market stability or instability and recession, respectively. Attention is paid to the global processes affecting the traditional money markets and the accumulated experience of the institutions to deal with the crises. The increasing digitization in the industry, the economy and the daily life of every single person inevitably gives rise to the need for the use of digital currency to guarantee transactions between individual parties. The idea for these still unrealized needs was born nearly 40 years ago, and the first realization took place in 1996, when e-gold was born. Today, we have hundreds of cryptocurrencies that still operate in an unregulated market, and their legal status still varies from country to country. The desire of individual countries and banking institutions to start their legally regulated use by already developing and testing their own currencies is presented.