journal N 4.2023

In the era of modern technological evolution, the fundamental economic systems existing today are undergoing a significant transformation. One of the most convincing changes is in the field of finance. A clear example of this is the rapid increase in the number of digital currencies, which has attracted the attention of the world community.
A digital currency is any currency that exists and circulates only in electronic form. Today, most digital currencies are also cryptocurrencies. Cryptocurrency is a digital currency based on blockchain technology (Blockchain, Eng. – a chain of blocks – an ever-growing list of records called "blocks") and protected cryptographically (Greek: kryptós – secret, hidden).
The history of blockchain creation begins in 1982. American cryptographer David Chaum first presented a blockchain-like protocol in his thesis, which was further developed by programmer Stuart Hubbert and physicist Scott Stornett. They invented decentralized distributed ledger technology DLT (Distributed ledger technology), which is based on blockchain technology. It is the technology of the future and is designed to securely store information, speed up transactions and eliminate intermediary links (banks, notaries, various payment systems, etc.). When making transactions, data is simultaneously shared with millions of computers connected to the cryptocurrency network and they are copied. Such a system excludes the possibility of stealing or changing information from any block, as this requires hacking all computers connected to the cryptocurrency network. This is practically impossible and unattainable, since the system automatically detects attempts to falsify or steal data.
Users use digital wallets to store and transact digital currencies. The wallet has two keys – public and private.
Digital currencies have both unique advantages and disadvantages compared to traditional fiat currencies.
The price of cryptocurrency is influenced by the following factors: supply and demand, positive or negative evaluations made in mass media, infrastructure, statements of famous people, attitude of states towards cryptocurrency, etc.
According to the stability of the exchange rate, three main types of digital currency can be distinguished: unstable cryptocurrency (bitcoin, ethereum, etc.), stable cryptocurrency or stablecoin, and digital currency of the central bank.
An unstable cryptocurrency is a digital currency that is not backed by any kind of physical wealth. That's why its rate is constantly fluctuating. Therefore, some countries have introduced a new type of stablecoin to ensure the stability of the cryptocurrency price.
A stablecoin is a digital currency with a fixed or stable exchange rate. In the crypto industry, its most common types, such as: Tether (USDT), Stasis Euro (EURS), PAX Gold (PAXG), Tether Gold (XAUT), etc., are respectively tied to the price of the dollar, euro or gold.
A central bank digital currency is a currency issued and controlled by a country's central bank. The digital currency of the central bank is supported by the national bank of the state.
The main task of introducing digital currency is: acceleration and cheapness of transactions, removal of intermediaries, transparency, protection of financial security of the population, etc.
The costs of digital currency circulation are much lower than the costs of fiat money circulation.
Government-backed digital currencies are based on the use of digital technologies; they are focused on the stability and progress of the management of the national economy, and thus, in fact, also present a modern alternative to traditional fiat money.
The rapid growth and development of central bank digital currency adoption will play an important role in changing the global financial landscape. In the future, more and more large and small businesses will start paying with digital currencies. The introduction of central bank digital currency will increase the level of security of monetary relations.
In order for central banks to switch to digital currency, it is necessary to take certain measures.
Initially, the introduction of a central bank digital currency will require initial and ongoing technological costs, which can ensure their effectiveness in the long run, especially in areas such as distribution and transaction fees.
Creating a state-backed digital currency is a multifaceted challenge. It goes beyond the areas of technological infrastructure and includes regulatory, economic and social aspects. Convenience, security, accessibility and digital wallet creation of Central Bank's digital currency is a necessary condition for its recognition.
Several countries around the world have launched their own government-backed digital currency development projects. To date, banks in three countries: Nigeria, Jamaica and the Bahamas have already released central bank digital currencies into circulation. And the banks of China, India, Ghana, Uruguay and Georgia are in the pilot stage of the central bank digital currency.
In order to promote the use of new financial technologies, increase the efficiency of the payment system and improve financial inclusion, the National Bank of Georgia has been actively researching the features of the Central Bank's digital currency since 2020, including the capabilities of the digital lari, its systematic arrangement and ways of using it in the market.
Currently, cryptocurrencies are not legal means of payment in Georgia. Activities related to it are not regulated by the legislation of Georgia and, therefore, virtual currency does not represent the sphere of regulation of the National Bank. But, after the transition to the digital currency of the central bank, the issuance of digital currency by any individual or group other than the central bank should be strictly prohibited in order to prevent its counterfeiting and protect its security.
Across the country, for public trust and recognition of digital money, study centers on the implementation and use of the state's digital currency should be created with educational institutions and municipalities, and trainings should be conducted.
Banks in the country should replace fiat money in citizens' accounts with the appropriate amount of digital currency as quickly and painlessly as possible.
To accelerate the real-life implementation of the central bank digital currency, the central bank should initially distribute the digital currency free of charge to the population in a pilot environment so that people can make payments with the government's digital money.
In the future, it is possible and necessary to switch to a single cryptocurrency worldwide. The function of such a currency may be performed by any cryptocurrency currently in circulation, or a new cryptocurrency may be created based on the agreement of different countries of the world, which will fully meet the relevant requirements.

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Keywords: Blockchain technology, cryptocurrency, stablecoin, fiat money, central bank digital currency, Georgian lari.
JEL Codes: G20, G21, O16,