The Potential of Virtual Currencies to Contribute to the Welfare of Individuals and the Global Economic Development

This article focuses on the analysis of the potential of virtual currencies to contribute to global economic development, given their innovative characteristics and their rapid increase in popularity. This article intends to fill the gap in understanding the characteristics and the risks of the emergence of virtual currencies as part of the global financial systems. There is a huge potential of the new currencies backed by blockchain technology, to develop the existing payment systems and upgrade them, as they represent an innovative form of money with increased security of the transactions. For instance, the central banks of some of the world financial leaders, such as the US, UK, China, etc. have been experimenting with the possibility of integrating the technology behind the virtual currencies into the internal payment systems. In this sense, the governments are also working on creating a better legal framework to improve the recognition, licensing and registration of virtual currencies as an official form of payment, and also creating a better control mechanism of the new currency (Vejacka, 2014).