Digital currencies have been the prime topic of debate for global leaders and financial agencies for long enough.

Some people believe it to be an excellent opportunity to revive the global economy. Whereas others believe it to be a threat to the reserved currency system around the world.

Well, of course, the system has the potential to enable social and economic growth globally. But cynics often quote the cybercrime associated with it to be the biggest reason for not adopting it.

Perhaps, it is the only reason cynics have to defend their way and avoid adopting the digital transformation.

Nonetheless, here are a few reasons to legalize digital currency to replace the traditional economic infrastructure.

Poorly Banked Countries Can Benefit Most

It may come to you as a surprise, but more than a third of the world’s population has no access to basic banking. There are no loans, checking accounts, or even a way to send or receive money other than cash.

With the adoption of digital currency, the overall infrastructure for financial transactions can be overhauled. The population that has no access can be offered an alternative to unsafe and dangerous lending practices.

It could benefit the economies in the poorly-banked countries and help them create a centralized banking system. Thereby allowing them to endorse development projects more efficiently.

Improved Transaction Transparency

Whether officially claimed or not, digital currencies use a robust technology for completing transactions. You probably know it too- Blockchain.

The technology was first used for Bitcoin, the most popular cryptocurrency, in 2009. And recently, launched Chinese digital currency, yuan pay also used it.

What’s fascinating about the technology is its ability to create irreversible transactions, which can not be modified.

As a result, it offers financial agencies and banking institutions a tool to improve transparency in transactions.

Moreover, the blockchain technology paired with cryptography allows users and banking institutions to fight off the risks from cyber attacks.

Reduced Transaction Cost

With traditional transactions comes the costs of sending and receiving funds from one point to another. These costs, by and large, include minting costs, service charges, interests, and maintenance of the institutional building.

Apart from these, there are costs at every step of a transaction since multiple intermediaries are involved.

With digital money, these transactions can be made cheaper. After all, there’s no need for intermediaries, so there’s no cost associated with it.

Promoting Entrepreneurial Spirits

In recent years, several startups have come up that entirely work around the blockchain or the crypto ecosystem.

However, the lack of stern regulations around these industries has led these startups to either shut down or start off in foreign lands.

But, with its legalization, the scenario can reverse, and we can expect more and more startups to surface.

Perhaps, it needs no mention of how economies can benefit from startups and create more employment opportunities.

Ultimately, it will benefit a global population by offering access to basic financial and credit systems.

The Bottomline

Evidently, the legalization of digital currency will benefit world economies in the longer run. But, only if the laws and regulations are implemented systematically and sustainably.