Basically, when it comes to digital currency, we're kind of at a crossroads. There is still a significant amount of physical cash in circulation, and several institutions and governments have not yet adopted a central bank digital currency. In addition, a growing number of individuals are leading cashless lives, and the cryptocurrency bubble is still very much in motion. As decision-making governments, financial agencies, multinational organizations, and banks start to take digital currencies seriously as a solution for the future, this means that they are under closer examination than ever.

Digital currency can offer a wide range of advantages over traditional methods of payment, including faster payments and greater transparency. The following are the Pros of digital currency;

Faster transactions: Compared to transactions made through traditional financial institutions, those made using digital currencies are substantially faster. For instance, using a traditional bank to send money overseas might often take days for the recipient's account to receive the funds, while using digital currencies makes this process considerably faster, if not instant.

No charges: Even if the funds in your account are technically yours, banks nevertheless need to turn a profit by assessing fees including closing costs, ATM fees, and transfer costs. Additionally, it's common to pay fees while using your money abroad. A digital money can be completely yours to keep and use anyway you like, frequently with no expenses.

Payment tracking: Digital currencies, especially those that employ blockchain technology, are designed to enable transparency for tracking funds in the ways that they are designed. The records that are kept after each transaction allow you to check and see where your money is at any moment. This level of service just cannot be provided by legacy institutions.

Protection from fraud: When you purchase anything online the typical method, businesses save your personal and payment information, making them susceptible to fraud should they ever go missing. Since direct transactions with digital currencies are always anonymous, no sharing of personal information is ever necessary.

Better accessibility: The accessibility that digital currency provides is one of its major benefits. Anyone with access to the internet can log on and mine for their preferred coin or purchase money. This contrasts with traditional institutions, which frequently erect obstacles that restrict accessibility, such as a minimum contribution or a credit check.

No inflation: Numerous digital currencies are, by design, immune to inflation. For instance, there is a fixed supply of bitcoin since there is a limit amount of coins that can exist (21 million). The idea behind inflation is that because banks are constantly printing more money, its value decreases. In contrast, as the limit gets closer, the value of bitcoins will increase over time, making them a deflationary currency.

Cons of Digital Currencies?

Assets prone to volatility: Since the majority of digital currencies are still decentralized, neither a government nor a central bank backs them. They can lose or gain value quickly since they are not stable and are exposed to a great deal of volatility. Digital currency traders may have assets that are worth a lot one minute, but if the value drops, they may quickly lose value. CBDCs may be a much more secure alternative if they are ever issued with backing from banks or governments.

Security concerns: Although using digital currencies eliminates the need to save personal information online, the currency you possess could still be subject to hacks. There have been several instances where businesses that keep currency have had it stolen during an attack. Additionally, traditional banks can provide a greater range of security and recompense for customers whose money is stolen.

Lack of regulation: The well-established financial sector is highly regulated, which promotes stability and ensures that no improper behavior occurs. The majority of digital currencies are now exempt from this regulation, giving users independence but also making them more vulnerable to questionable behavior.

More accessible for criminals: Although the accessibility of digital currency provides advantages, there are drawbacks as well. The most concerning aspect of this greater access is that it can expose the currency to criminal elements attempting to abuse it. The use of digital currency for money laundering or funding illegal operations is what authorities are most worried about.

Future uncertainty: Unlike traditional payment methods that have endured and appear to have a bright future, digital money is still relatively young and yet in its infancy. The future is so unpredictable, and there is no assurance that the digital monies you already have will remain useable or retain value.