The possibilities that digital currencies provide cannot be denied at all. Also, the feature of convenience that digital currencies provide is one the major factor of their popularity in the general public. Global transfers can be made in an instant through cryptos very easily. But uncertainty and volatility associated with cryptocurrencies is also very high. One day bitcoin’s price is up by 2x and the next day it is down by a huge chunk. All of this leads to one simple question, will cryptocurrencies replace be able to replace fiat currencies in the future or will fiat still prove to be beneficial?
Thomas Power, a well renowned crypto enthusiast, board member at 9 Spokes, The Business Cafe, Electric Dog and Digital Youth Academy is of the view that in the future, both crypto and fiat currencies will have mixed application in the financial market.
Upon inquiry by BlockPublisher regarding the possibility of seeing crypto replacing fiat in the future, Thomas Power stated that, “No blended outcome most likely.”
This implies that although we might not see crypto completely overtaking fiat currencies in the future, it is also not likely to die out. The major problem that cryptocurrencies are facing right now is of acceptance. Will the general public accept bitcoin a large scale while it is volatile and unpredictable on such a large scale? Investors are also hesitant from entering this world owing the insecurity that is present in this space. Everyone demands security and predictability in the long run.
If cryptocurrency needs to attain the spot that fiat currencies is enjoying right now, it has to overcome the hurdles that are associated with it. Stability is one thing that bitcoins needs right now but the situation doesn’t seem very likely in the near future. Acceptance still remains to be attained by digital currencies on an official scale. The establishment of a crypto-linked exchange-traded fund (ETF) also seems very far as of yet. Unless these developments are not made in the crypto space, the prevalence of bitcoin and other digital currencies in the financial world seems very less likely.
In a nutshell, even if developments are made in the digital currency world, it will still not entirely replace fiat on an official scale, as suggested by Thomas Power. We will most probably see both being used in the everyday market.