As cryptocurrency usage is on the rise, large centralized banks are coming up with new and innovative ways to compete. Allow us to introduce, ‘E-Fiat’ or ‘Fiat Money’. Fiat Money is a type of currency that is issued by a centralized bank. It serves as legal tender (you can actually use it to buy stuff) however, there is nothing physical about it. It is based entirely on the credit of the economy.
Unlike most cryptocurrencies, Fiat Money is regulated by the government and therefore, people are inclined to trust it without question. Fiat Currencies like USD, Euro etc would retrieve their value based on the country’s economic trends, supply and demand etc.
People may be thinking that this is absolutely absurd. We have enough intangible things in this world due to the internet and online technology. However, this form of Fiat Money dates back to 1000 AD when gold was a main source of currency. People traded gold as a means of payment.
Fiat Money is highly regulated by the government and therefore incredibly stable, unlike most forms of cryptocurrency. The problem? Along with such a stable currency, comes little wiggle room for a huge profit. People who acquired Bitcoin very early on, have likely change their names already. They likely have massive amounts of money sitting in crypto and can attest to the likelihood of a huge upswing. While Fiat Money is mostly stable, there have been economic recessions that could certainly affect this.
Would you rather Fiat Money or Crypto?
