Currency available in digital format is known as a digital currency. The transaction of these currencies only takes place through computers and smart wallets with a connection to the internet or designated networks. Further, digital currency is distinguished between cryptocurrencies, virtual currencies, and Central Bank Digital Currencies (CBDCs). However, among these currencies, cryptocurrencies are the most popular. The average percentage of people who possess cryptocurrencies worldwide as of 2023 is anticipated to be about 3%, with more than 419 million users. Every digital currency has its own features but the popularity of cryptocurrencies lies in its ability to make faster transactions even over the countries’ borders.
Cryptocurrencies make the transaction easy. In the case of traditional currencies, the financial institution acts as an intermediate for the transaction between the sender and receiver. However, in the case of cryptocurrencies, the process takes place directly between the sender and receiver without any middlemen. Also, in many cases, the financial institution system has various technical issues which restrict the transactions but this is not in the case of cryptocurrencies. Hence, cryptocurrencies eliminate every issue with existing banking.
A region such as Africa, Asia Pacific, and South America has been seeing the largest adoption of cryptocurrencies. In Asia, India, Vietnam, and Pakistan the trend of cryptocurrencies is on surge. In Indonesia, about 40% of respondents between November 2021 and February 2022 owned cryptocurrency. In contrast, approximately 17% of Australian respondents who were polled in 2022 claimed they owned cryptocurrencies. This is since the Asia Pacific nation is advancing its financial technology significantly. Moreover, Japan has been seen advancing its financing ecosystem along with South Korea which is the influencing factor for the growth of the market in this entire region.
Yet, cryptocurrencies are not that popular. However, with the growing population of youth large investment is expected to be made in this. The trend of cryptocurrencies is popular among the youth. Also, over the past few decades, the prevalence of recession and economic difficulties has grown which has lost the trust of the young generation. Till now, there has been four biggest recession recorded which brought huge unemployment and poverty. Hence, the young generation believes in investing in digital assets that are in financial institutions.