Digital Currency Competition in Global Trade. Departure to a New Era or Persistence of Market Structures?

In 2022, the World Economic Forum claimed that Digital Currencies could revolutionize global trade in future. As the world hurtles into the digital age, the financial landscape is undergoing a transformative shift with the rise of digital currencies. The emergence of cryptocurrencies and central bank digital currencies has sparked a new era of international competition, reshaping the way nations conduct transactions, manage their economies, and interact on the global stage. Digital currencies of several countries will compete with specific economic and technical characteristics for shares in trade and financial markets. The paper analyses the potential of currency system shifts from Dollar dominance toward a new multipolar regime. Based on monetary theory as well as current empirical research, it considers chances and risks associated with digital currency competition among leading central bank currencies but also with private digital currency forms and outlines prospective development paths of their use in global trade.