The Impact of Digital Currency Development on the Global Financial Market and Regulatory Strategies

Abstract

With the continuous advancement of technology, digital currency has gradually become a new hotspot in the global financial market. The rise of well-known digital currencies such as Bitcoin and Ethereum has sparked great expectations for the future of digital currencies. However, the development of digital currency is not without its challenges, as it presents both opportunities and obstacles. Digital currency is characterized by decentralization, which can reduce transaction costs and improve transaction efficiency. Traditional financial systems often require intermediaries for transaction verification and recording, while digital currency, through blockchain technology, achieves decentralized transaction verification and recording, significantly reducing transaction costs and time. Moreover, digital currency facilitates more convenient cross-border payments and settlements, which helps to enhance the efficiency of the global financial market. However, the use of digital currency is also prone to misuse, such as for money laundering, drug trafficking, and other illegal activities, which have raised concerns about the legality and credibility of digital currency. In response to the opportunities and challenges posed by the rise of digital currency, it is essential to strengthen regulation and technological risk prevention while actively promoting the development and application of digital currency. Only by doing so can we fully leverage the advantages of digital currency and inject new momentum into the development of the global financial market.