THE IMPACT OF DIGITAL CURRENCY ON THE TRANSFORMATION OF MONETARY POLICY

Abstract

The purpose of the paper is to study the specifics of the organization of issue and circulation of digital money by central banks, to summarize existing global expe-rience and assess the potential impact of digital currencies on the conditions of monetary policy, the functioning of the mechanism of money transmission and ensuring financial stability through the implementation of sound decisions of cen-tral banks in the digitalization of finance. Methodology. The study is based on an analysis of the scientific literature and points of view of foreign and domestic ex-perts in the field of digital technology. It is also based on the experience of the European Central Bank, the People's Bank of China, the Bank of England, the Bank of Israel and the National Bank of Ukraine on the implementation of pilot projects for the issue and use of digital currencies, quantitative and qualitative assessment of the impact of new forms of money on monetary policy, the func-tioning of the transmission mechanism, state finance, efficiency of payment sys-tems and payment transactions. In processing the material of the article used a set of general scientific and special methods of research, such as dialectical, his-torical-logical, system-functional and analytical approaches, generalization, scien-tific abstraction and others. The results of the study showed that the proposed digital currencies of central banks should be considered as a new high-tech dema-terialized form of national fiat money. Having summarized the impact of the issue and circulation of digital money by central banks on the main parameters of eco-nomic policy, it can be argued that their use will lead to significant changes in the structure and functions of commercial and central banks, as well as existing na-tional and transnational payment systems. The issuance and circulation of digital currency can significantly affect the nature of central banks' monetary policy, the conditions under which the monetary transmission mechanism functions, and the implementation of fiscal policy. Practical implications. The study revealed the main advantages and disadvantages of using centralized and decentralized models of issue and circulation of digital money by central banks, identified the direc-tions of institutional changes in the development of the banking system and the implementation of monetary policy in a digitalized economy, which will provide a high level of control over all monetary transactions of market players. Val-ue/originality. Using the experience of pilot projects on the issue and circulation of digital currencies of central banks will help to improve the effectiveness of monetary policy, to activate the mechanism of monetary transmission, to ensure the stable functioning of the financial system and reduce the level of shadow economy and corruption.

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