Author(s)

Zheng Xinyi ¹

Affiliation(s)

¹ Zhejiang University, Hangzhou, 310000, China

Corresponding Author

Zheng Xinyi

ABSTRACT

With the acceleration of global digitalization, digital currencies, as an emerging payment tool, are exerting profound impacts on the international payment system. This paper aims to explore the multifaceted effects of digital currencies on the international payment system, including enhancing payment efficiency, improving payment security, promoting financial inclusion, and the potential impacts on monetary policy. First, the paper provides a detailed explanation of the definition and classification of digital currencies, distinguishing between central bank digital currencies (CBDCs), cryptocurrencies, and stablecoins. Next, it analyzes the current state and limitations of the traditional international payment system, such as high costs, inefficiency, and lack of transparency. Building on this foundation, the paper delves into how digital currencies positively influence the international payment system through real-time clearing, reduced transaction costs, the application of blockchain technology, and the enhancement of financial inclusion. At the same time, the paper highlights the challenges faced by digital currencies in terms of technology, legal and regulatory frameworks, and economic and financial stability. Finally, the paper proposes policy recommendations, including strengthening international cooperation, improving regulatory frameworks, and promoting technological innovation, to guide the future development of digital currencies. This research provides a comprehensive perspective on understanding the impact of digital currencies on the international payment system and offers a theoretical basis for the formulation of relevant policies.

KEYWORDS

Digital Currency, International Payment System, Central Bank Digital Currency, Cryptocurrency, Stablecoin, Payment Efficiency, Payment Security, Financial Inclusion, Monetary Policy, Blockchain Technology

CITE THIS PAPER

Zheng Xinyi, The Impact of Digital Currency on the International Payment System. Financial Engineering and Risk Management (2025) Vol. 8: 172-176. DOI: http://dx.doi.org/10.23977/ferm.2025.080122.

REFERENCES

[1] Liu, H. (2021). The evolution of global digital currency and its impact on international trade settlement [Master's thesis, University of International Business and Economics].
[2] Ren, H. R. (2025). Research on the development of commercial banks in the era of digital currency. Economic Outlook of the Bohai Rim, (01), 4–7. 
[3] Ye, L. L. (2024). The impact and challenges of digital currency on bank monetary policy. Economist, (11), 113–114, 116.

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