The crypto world is thought to be an alternative to the traditional fiat world by some of its proponents. But is it possible for a world that just emerged on the global scale in the last few years to replace a well-established framework of traditional fiat currencies which is there for centuries?
In order to get a perspective on this, BlockPublisher got in touch with Leon White, a member of Dash’s marketing team. Dash is one of the leading cryptocurrencies of the modern day and it is interesting to get an opinion on this matter from someone who is actively involved in this world.
Talking to BlockPublisher about the aspect of cryptos replacing fiat, Leon stated:
I don’t think crypto will replace fiat in the short to medium term, particularly in developed economies – it simply doesn’t solve enough problems for enough people to see the rapid adoption many backers expect.
Further elaborating on this, Leon said:
I see the primary use cases for crypto in markets where trust in centralized institutions is weak, where value is easily lost and where transactions are slow, difficult and expensive. I expect monetary cryptocurrency to develop a robust ecosystem in these economies, effectively leapfrogging the entire development of a legacy financial ecosystem in the same way that many countries have foregone building out a wired telephony system in favour of wireless technologies – sometimes future technologies are so easy and cheap to adopt, that economic development does not need to follow the path set out by developed economies.
As suggested by Leon, cryptocurrencies can prove to be revolutionary in the financial markets which are largely centralized and are prone to problems like value loss, slow operation, complexity, and expensiveness. Cryptos provide a global framework of operation and can help developing economies fight the problems just mentioned. In a blockchain-based ecosystem, there is no need to rely on any third-party and usually, all the proceedings taking place on the network are visible to all.
A transparent fabric of operation can be established using cryptos with a certain level of anonymity. This can help struggling economies overcome the problems associated with their traditional fiat systems.
The crypto world is still in its phase of development. It has a lot of shortcomings that it needs to overcome before the aspect of replacing fiat is brought into the discussion. As of now, the acceptance of cryptos among the general public is not very large. The image of such digital assets is largely negative. Problems like volatility, liquidity, manipulation, lack of regulation etc. have stopped this world from getting large-scale adoption. Official acceptance regarding cryptos is also on the lower side in various countries because they provide frameworks that are global and are not limited by the boundaries of a country.
The prospects offered by cryptos are revolutionary. It’s not the case that the fiat frameworks are free from any kind of troubles. We have seen the traditional frameworks breaking down in countries like Iran, Venezuela, Zimbabwe etc. It will be interesting to see how crypto help to restructure the global financial ecosystem moving forward from here on as developments are made regarding its progress.