Digital in a digital form, unlike the conventional

Digital Currencies and
rapidly Developing Technology

            Technology is modifying
vital activities across the globe. Technological advancements have enhanced
production, transportation, education, and communication efficiency. Although
the impacts of technology in the commercial sector have been phenomenal, some
of these effects have introduced legal complications and ethical issues. A good
example of such a technological advancement is the emergence and rapid growth
of digital currency. Digital currency is a medium of exchange that is purely
electronically based 1. In this respect, digital currency is only available
in a digital form, unlike the conventional national currencies that are
available in physical forms such as banknotes and coins.

 Commonly, most people refer to digital
currency as electronic money. Recently, there has been an emergence of a new
form of digital currency known as cryptocurrency. Cryptocurrency is a digital
currency that has a security feature, which uses cryptography to protect it
from being forged 2. Cryptocurrencies include digital currencies such as
Bitcoin, which is the most popular. Others include Litecoin, Namecoin,
Swiftcoin, Peercoin, and Emercoin. In practice, digital currencies are privately
issued electronic units that circulate on the internet 1. It is crucial to
note that this form of currency is not a legal tender. Therefore, it is not
controlled by nations’ central banks. 

Consequently, digital
currencies do not have a specific unit value. Each digital currency has a
unique value attached to it by its creators. Digital currencies’ operators
attach physical assets to digital currencies when creating them. For instance,
renowned assets such as gold, silver, and dollars back these electronic
currencies 1. However, some digital currencies such as Bitcoin are backed by
computer processing power. The concept of digital currency was implemented into
the financial markets due to its efficiency in transaction and security. 

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 The emergence of Bitcoin in 2009 increased the
popularity of digital currencies. Then again, Bitcoin is not the first type of
digital currency. In fact, the history of digital currency dates back to 1983
when researcher David Chaum proposed the ideology of digital cash. To market his
ideas, Chaum created a company called Digicash, which specialized in electronic
cash. After this initial suggestion, it took more than a decade for individuals
with or without prior banking experience to introduce a new digital currency
into the consumer market 1.

emergence of Bitcoin in 2009 refined the idea of digital currency. Bitcoin
introduced a unique security feature that utilized cryptography technology to
warrant its security. This distinctive security feature makes cryptocurrency
highly secure. This security feature enables dealers to trade using digital
currencies anonymously. The anonymous trading of digital currencies raises
ethical, policy, and security issues. With their rapid rise to fame, there are
uncertainties on the future of digital currencies. This paper evaluates how
advancements in technology have promoted the growth of digital currencies. Additionally,
it assesses the impacts of digital currencies on the financial sector and the
future. To address these objectives, this paper hypothesizes that technology
has significantly contributed to the growing use of digital currency,
therefore,  enhancing transaction
efficiency in the commercial sector.

Related Works

and the Growth of Digital Currency

            Technology played an
influential role in the emergence and growth of digital currency 3.
Communication technology such as the internet facilitates the existence of
digital currency. Digital currency exists in electronic form. For that reason,
technology is instrumental in the creation and survival of digital currencies.
Moreover, information technology is vital in fostering effective and secure communication
channels between digital currency traders 3.

technology advancements in the last few years led to a substantial increment in
the number of digital currencies in the global commercial sector. In particular,
the improvement in networking and mining technologies played a significant role
in the spread of cryptocurrencies 4. In reality, modern digital currencies
require not only an advanced technological platform but also a secure one. Due
to the high financial value attached to the modern decentralized digital
currencies such as Bitcoin, they have become prime targets of cyber-attacks
5. Because of this vulnerability, the current high-value digital currencies
such as Bitcoin utilize an advanced technology known as blockchain 6. This
technology creates a secure platform, ledger, and database where digital
currency traders store and exchange values without intermediaries such as banks
or governments. 

Impact of
Digital Currency on the Commercial Sector

            The effects of digital currency on the
global commercial sector are contentious. However, it has introduced a new
dimension of conducting commercial activities that are efficient and cheap 7.
Digital currencies promote the provision of digital banking services and
electronic transfer of money. These electronic banking and money transfer
services are cheap, efficient, and fast. Moreover, digital currencies such as Bitcoin
have proved that it is possible to transact online safely and securely without
being traced. In this respect, the existence of digital currencies serves as a
model of enhancing service delivery in the conventional financial sector 8.
The survival and success of digital wallets such as Apple Pay are instrumental
in directing the adaption of new payment measures in the contemporary banking

the prevalence of digital currencies has introduced complications in the global
commercial sector. Particularly, the use of decentralized digital currencies
such as Bitcoin has already introduced an economic policy crisis. The use of
decentralized digital currencies for commercial activities weakens central banks’
abilities to control economic policy, and money transfers 9 10.

The Future
of Digital Currency

            Digital currency faces
the same survival uncertainties that the internet faced when it was created.
When the internet was launched, a significant percentage of people believed
that it would not last long. To their surprise, the internet continues to
advance. Just like the internet, digital currency is here to stay. In fact,
there is a possibility of this type of currency replacing conventional
banknotes and coins as the primary unit of commercial transaction 11. The present-day
world relies heavily on technology. The close connection that exists between
technology and digital currency serves as its safe-path to the future 12.
However, the realization of this forecast depends on the implementation of
effective policy measures to regulate and monitor the use of digital


            This study utilized a
qualitative research method entailing a content analysis of scholarly sources
relating to the topic of study. However, before conducting the data search of
the scholarly sources, a comprehensive background research was conducted to
gain insight on the critical issues and terminologies required to complete this
study. This background study entailed reading recent articles on digital
currency on the internet. This background study was instrumental in developing
the study objectives, hypothesis, and the subsequent literature research. The
scholarly sources used in this study were subjected to a well-structured
inclusion criterion.

 Firstly, this study only used scholarly
materials published from 2015 onwards. The use of contemporary scholarly
information ensures that the study utilized recent insights from experts to
address its objectives and hypothesis. Secondly, the study utilized keywords
such as digital currency, bitcoin, financial policy, and blockchain technology
in its search process. These keywords were instrumental in streamlining the database
search process. They ensured that the materials obtained were within the scope
of the research objectives and hypothesis.

the scholarly materials were classified into three pools. The first pool
entailed sources that focused on the relationship between technological
developments and the rapid growth of digital currency. The second group focused
on the effects of digital currency on the global commercial sector. Finally,
the last group of scholarly resources focused on the future of digital

conducting this process, ten scholarly sources entailing books and articles
were selected. Each of these sources was then critically analyzed based on the
sub-section of the study it addresses, and its findings and conclusion noted.
The deliberations of all the ten sources were analyzed and used to test the
research objectives and hypothesis of this study. Subsequently, the findings of
this analysis were then used to structure the discussion and conclusion
sections of this study.

Results and Discussion

            Technology plays an influential role in
the continuing rise in popularity of digital currencies. Currently, the term
digital currency is synonymously used to refer to cryptocurrency. However, it
is essential to note that cryptocurrency is one of the many types of digital
currencies that exist today 1. Regardless of their diverse natures, all
digital currencies rely on technology for their existence. The dependency on
technology separates digital currency from the other conversational currencies
such as banknotes and coins, which are produced and managed by the government through
the central bank.

content analysis revealed that each digital currency, centralized or
decentralized relies on a specific form of information technology. It was also
noted that the decentralized forms of digital currencies such as cryptocurrencies
or what is referred to as virtual currencies utilized an advanced form of
technology compared to the rest. The advanced technology is vital in ensuring
that all the transactions are conducted anonymously. In fact, it was
established that it is impossible to trace cryptocurrency traders. However,
this trade is highly secure from fraudulent acts such as double-transactions,
which are witnessed in the digital banking activities of conventional banking
systems. For instance, Bitcoin uses blockchain technologies that are difficult
to monitor.

it was noted that most of the digital currencies emerged in the early 21st
century. During this period, the world experienced intensive research,
innovation, and advancement in information technology systems. It is logical to
argue that this intensive development of information technology facilitated the
creation of digital currencies. As the information technology improved, more
digital currencies emerged. For instance, the emergence of Bitcoin in 2009 prompted
the arrival of what experts term as altcoins. Altcoins are alternatives to
Bitcoin and include cryptocurrencies such as Litecoin, Ethereum, and Zcash. For
that reason, a positive correlation exists between the spread of digital
currency use and technological advancements.

this study established that digital currency usage positively affects the
global commercial sector. Digital currencies enhance financial transaction
efficiency. They also support the growth of e-commerce through providing stable
and secure payment options. Digital currencies destroyed the transaction
barriers that were imposed by national currencies. For instance, customers had
to convert their local currencies to international currencies such as the Euro
or the United States dollar before making an international payment. However,
digital currencies have eliminated these transactional barriers by embracing a
universal perspective. In a survey conducted by Statista 2016, 90% of the
responding banks admitted that they were interested in using blockchain or distributed
ledger technology in payments, therefore, suggesting the long-term use of
digital currency. The findings of this survey are illustrated in the figure



recent times, there have been efforts to regulate the use of digital currencies
such as Bitcoin. As witnessed in the content analysis, nations hold differing
opinions on the legality of decentralized digital currencies. For instance,
China illegalized trading using Bitcoin. In contrast, the United States allowed
Bitcoin trade despite subjecting it to taxation policies. The advanced
technology employed by most digital currencies lowers the ability of the
central bank to regulate their use through economic policies. A significant
percentage of economic players maintain that the widespread use of digital
currencies will affect the global economy adversely 9. However, there are professionals
who argue that policymakers can apply the advanced technology used by digital
currency to formulate effective financial policies 11. In this regard, the
commercial sector, particularly the banking industry needs to imitate the key
attributes of digital currencies to enhance its services 8. 

opinions exist on the long-term fate of digital currency. Some people argue
that digital currencies will not last while others claim that they are the
future of the global currency. Amid these debates, this study observed that the
future of digital currency is promising. Actually, there is a possibility of
digital currencies replacing national currencies in the future. This
observation is based on two perspectives. Firstly, it is based on the close
relationship between technology and digital currency 7 8 10. Secondly, it
is founded on the argument about globalization effects 5.

On the first
perspective, there is a close relationship between technology and digital
currency. As technology improves, so does the use and popularity of digital
currency. The present-day society relies on technology for most of its
activities ranging from production to commercial transactions. For that reason,
there is a likelihood of the commercial sector favoring digital currency over
conventional currencies due to the efficiency entailed in its transaction.
Secondly, globalization is increasingly eliminating national barriers to
international trade. It has increased the interconnection between nations.

Thus, countries will
prefer to use neutral currencies in their trading activities. This move will
favor the utilization of digital currency. However, for this move to materialize,
there is an urgent need to revise the current financial policies to align them
with the ongoing technological advancements. In fact, the current inability of
the financial policies to regulate digital currencies is a sufficient proof
that the laws need revision. With improved laws, digital currency is a more
efficient tool for commercial transaction compared to the conventional national
currencies due to its universality and transaction efficiency.


The contemporary society
relies on technology in all of its activities. The enhanced reliance on technology
has spread the use of digital currency. Although this use has not been adopted
in the formal sector, e-commerce activities are actively promoting the
popularity of digital currencies. Then again, the effects of the growing use of
digital currency on the commercial sector are unexploited. After conducting a comprehensive
content analysis of the relationship between digital currency, technology, and
the commercial sector, this paper concludes that a positive correlation exists between
technological advancements and the increasing use of digital currency.

The reviewed scholarly materials revealed that
digital currency requires a stable and secure technological foundation to
thrive. Moreover, the increasing use of digital currencies such as Bitcoin is
beneficial in improving the inefficiencies of the existing financial policies.
The inability of the current financial policies to regulate the use of digital
currency motivates policymakers to develop comprehensive policies that
accommodate the technological changes that are modifying the financial
industry. Finally, it is plausible to conclude that the use of digital currency
is likely to increase in the future. This view is based on a thorough analysis
of the relationship between digital currency, technological advancements, and
globalization effects. Nations should develop policies that promote the use of
digital currency because it provides an efficient and secure means of financial