THE IMPACT OF THE USE OF CRYPTOCURRENCIES ON THE INTERNATIONAL CURRENCY MARKET

Abstract

The article analyzes how the use of cryptocurrencies can affect the international currency market. Considering the definition of the concept of cryptocurrencies, it can be said that the emergence of this currency was greatly influenced by continuous technological improvements. Although the use of cryptocurrencies provides wider financial opportunities, at the same time it can disrupt the activities of financial institutions. Meanwhile, the foreign exchange market facilitates trade in foreign currencies and plays an important role in the financial market. The international currency market is an important part not only of finance, but also of the economy, and the emergence of the use of cryptocurrencies has brought unprecedented innovations to the market. When comparing cryptocurrencies and the currency market, it is considered that the main similarity is the demand and supply of the market. This means that the price goes up when there are more buyers than sellers. The presented foreign exchange market reaction to the use of cryptocurrencies reveals that countries are reluctant to use cryptocurrencies in trade because of possible negative consequences such as money laundering. However, investors can take advantage of the cryptocurrency rate and hedge against potential risks.