This refers to money that exists only electronically, with no physical coins or notes to represent it. Transactions are recorded using a decentralized digital ledger or with blockchain technology. The idea of using digital currency is to remove banks or governments’ interference in these transactions.
Unlike regular currencies, digital ones are created and can be transferred between people online. The most used digital currency is Bitcoin, often referred to as ‘digital gold’. Ethereum (ETH) is another example, but this works on smart contracts and apps. And now gaining popularity are stablecoins like USDT and USDC, which are pegged to the U.S. dollar and used for cross-border transactions.
The currencies can be used to buy goods and services online and in certain stores. Platforms such as Binance and Coinbase allow you to trade with digital currencies. Their main purpose is to move money quickly and cheaply across countries. In short, digital currencies enable fast, global transfers, though their prices are much more volatile compared to fiat currencies.
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