In the future, will fiat currencies be necessary in the world?

[yatogami]

Fiats are just a leftover of the times when there was no Internet, so different economics and societies can easily deal with them.
The process of transition from fiat money to digital currencies could take up to several decades and will be connected with a lot of problems, but the benefits will definitely be worth that.

[alex.ac.ab]

You need one or two currencies around the world, but not more.

[Finestream]

Fiats are just a leftover of the times when there was no Internet, so different economics and societies can easily deal with them.
The process of transition from fiat money to digital currencies could take up to several decades and will be connected with a lot of problems, but the benefits will definitely be worth that.

I know fiat currency will be in less necessity in the years to come knowing we are heading into a more digital world.If all of the  transactions will be successfully done with digital currencies,so more people will be exposed on using it making the use fiat currency left behind.

[ahmad21]

in the future, will there really be a need for fiat currency? Government can collect taxes in crypto, determine how to allocate it, and spend it in crypto. Ppl can receive salaries and do all commerce using crypto. Loans can be done in crypto. Fundraising can be in crypto. Sure, problems have to be worked out in terms of scalability, does it have to be completely decentralized, etc, the value has to become more stable. But theoretically, is there any reason to have fiat in the future?

It has been established that governments can now do taxation without representation by printing more money (which is a tax on everyone holding the currency), instead of trying to get a bill passed that allows it to increase the tax rate. With crypto this would be no more. All increased taxation would have to pass a vote.

From an economic standpoint, the idea that a country can stimulate its economy by adjusting interest rates is tenuous. There is just as strong an argument that lowering interest rates has caused speculation and bubbles, with calamitous results. In a crypto market economy, capital will flow from where it is needed less to where it is needed more.

Yes, without any doubt I would say that fiat currencies are absolutely necessary. I mean think about the poor people and the illiterate ones. How would they buy things if fiat currencies would be eliminated? The cryptocurrencies need a smart phone and a strong internet connection to operate. How the people living in rural areas and those who cannot afford digital devices and internet connection will live? So fiat will not be eliminated at least till the illiteracy rate and poverty rate ends.

[prtty2gal2]

As of now fiat currencies are still necessary in the world because it is the usual currency and if time will come cryptocurrency will be implemented and accepted and use all over the world ,but still fiat currency could still be of use, for the reason that there are places which are not yet digital access or internet acessessibility.

Yes.You have your point too.It's not easy to replace fiat currency with cryptocurrency because there are some people particularly living in the provinces who don't even know what cryptocurrency is since they have no internet connections in their area.Fiat currency will still be of high necessity for them.

For government to feel they are in control, fiats would still remain necessary and since it is not everyone in the world that would just hop into the crypto space, then, it is obvious fiat would still remain relevant whichever way.

Like you said, in most of the third world countries and even in some underdeveloped or developing countries, their exposure to new technologies can be quite low and would simply not have any other means than fiat currencies which obviously shows, we will just end up seeing this space as another means of payment and not the only means of payment.

[cahbagus555]

Fiat money or paper money needed in the world. Beside more flexible, many country dont have good internet infrastructure and paper money very usefull on that area. But many weakness on fiat money thats why cryptocurrency created to fill that holes

[ulhaq]

lol . what kind of question is this ?

Of course yes. Fiats currency or money , is verry essential and necesary to use since it is the first known legal currency before other payment method exists .

Fiats are verry important and should not be questioned by any other means .

Without fiat , do you think your so called cryptocurrency will have thier own value ? no right ?

fiats will always remain the number currency because majority of people will still stick using it , as it is more easier than cryptos and other medium .

Ha, this is completely false. Fiat is not the first known legal currency. What kind of answer is this? You need to study the history of money.

[ulhaq]

So am I and no, it is not economically viable. If Bitcoin was to completely replace fiat somehow one day and we discard all possible transitory effects as well as Bitcoin's current shortcomings (like transaction costs, confirmation times, etc) as inconsequential, the current level of economic cooperation and development mediated by fiat won't be sustainable, end of story. In effect, that would mean that the world economies would collapse in no time, and given that there are over 7B people now living, the things will quickly develop according to the Mad Max scenario, if not worse than that. Let's assume that the use of Bitcoin is forced upon humans by an almighty entity (or aliens) and there is no way back to fiat money. Just in case, you can substitute any other hard asset for Bitcoin in this hypothetical environment. It will still end in a disaster.

While many countries have reserves in another currency, countries are predominantly using different fiat currencies in international commerce. How is economic cooperation and development mediated by fiat? Economic cooperation and development can be mediated by any currency, or currencies, as it is now. Cooperation and development occurs through trade negotiations, international law, governmental and non-governmental organizations, etc. I'm not talking about anyone forcing the use of bitcoin, eg I mentioned above the possible combination of cryptocurrency and gold. Eg, governments may be using a decentralized cryptocurrency, but gold might still be used by individuals, and in some retail transactions.

To use deflation to mean anything else is just wrong. You say "deflationary in a broader sense of not being able or sufficient to satisfy the needs of a growing economy". That is a very common misconception in economics. "That there should be enough monetary supply to support such growth at all times" is flat out wrong. Economic growth is based on productivity and is not held back by monetary supply. This specific argument you make was analyzed in great detail and refuted in Rothbard's book The Mystery of Banking. I'm sure you will find the refutation in many other books/places as well.

Let's just agree to disagree. This topic is of no particular interest to me (it is the same stuff over and over again), nor am I interested in verbal gymnastics.

It is not verbal gymnastics. If you are not willing to understand why you are wrong on this point, then there is nothing I can do; I gave you a clear reference that explains in great detail. I have not seen a cogent argument supporting your view; If you can provide one I would look at it.

Producers profits are not dependent on inflation rates. I'd like to know what your source on that is. And any references on this forum I'd be happy to look at. Inflation/deflation are monetary phenomenon. Have you studied Nobel Prize winner Milton Friedman's books/discussions on monetary policy and inflation?

The fact that you need sources and cling to sources yourself says pretty much all. You are on your own here (and there).

The references were for your benefit. I am extensively read in economics and I studied it in school. I chose those 3 references to address the 3 specific points that you made. What is the source of your knowledge, your own mind? If you have references for any of those points (or even discussions on this forum which you mentioned in passing), I would take a look at them.

[ulhaq]

Also, you never clarified what you meant that bitcoin is inflationary. I have never seen this argument made anywhere, except as I mentioned, to mean that the supply is currently increasing.

[Baksobakar]

I do not think fiat is necessary for the world to keep economic stabilisation, However Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material from which the money is made so i think they can not deceive people any more so sooner or later it is going to be collapse.

I think if Bitcoin is never found, but someone like Paypal has implemented blockchain technology first, then we will not be in the competitive scenario we are facing now.
Fiat currencies are obviously not needed, there is an increasing trend towards currency digitization, and the blockchain-based currency is just the next generation of this. The problem is that Bitcoin comes out, and everyone treats it as a substitute for fiat currency, rather than a gradual increase in digital currencies like Paypal and Skrill.

[jak3]

first of all, I would like to point to a topic that digital payment is not a new thing to the world or any governments, Why does it did not conquer over faint currency. It's only because not everyone has access to the internet or maybe a smartphone and they person having those facility has no experience or maybe even worse they are not even aware of it. Let's think everyone gets the awareness but still, the capability and affordability plays a very important role in this decision. But till then I see a lot of need of faint currency as it can be used offline without any disturbance.

[Hell-raiser]

The references were for your benefit. I am extensively read in economics and I studied it in school. I chose those 3 references to address the 3 specific points that you made. What is the source of your knowledge, your own mind? If you have references for any of those points (or even discussions on this forum which you mentioned in passing), I would take a look at them.

Your references are irrelevant as well as your being "extensively read in economics and I studied it in school". If you can't explain things how you understand them, how can you know that you truly understand what someone else is saying or writing, Nobel prize winners included? This is not a pissing contest, anyway. If you can prove your point, go for it. I gave you an example from real life, and anyone who is actually versed in economics, who understands how deflation and inflation work on the level of separate companies and households, that is at the lowest possible level, knows that deflation is not inflation mirrored. Why should I care about your Nobel prize winners if you can't even answer a very simple question, which reveals your true knowledge and understanding of the matter (or rather lack thereof)?

[Vsamuel]

I disagree that fiat currencies are not necessary. Since time memorial, fiat currencies are the basis of trade and making payment. the are the most convenient asset that allows all individual, from the poorest person to the richest. Without fiat currency most people can not conduct simple buy and sell. not to taught about pay for services and goods. As much as digital currency is revolutionizing the world, we can not say that fiat currency are now irrelevant.

[HSRP]

Also, you never clarified what you meant that bitcoin is inflationary. I have never seen this argument made anywhere, except as I mentioned, to mean that the supply is currently increasing.

In fact, cash is still widely circulated and needed. Its main purpose is to promote the flow of economic. It needs to be replicated to meet the needs of life.

[darkr]

There must be one currency in all countries, so that there are no discrepancies in the price.  It will greatly simplify your life.

Unfortunately, it will never happen. It could be possible only in the perfect world, and this world will be never ideal. Fiat will exist always but the cryptocurrencies should be also used.

[upsidedown75]

Definitely a lot more necessary than the crypto we are trying to improve. I mean what else are you going to use for buying or selling stuff banter ? No way.

Hence, we are stuck with fiat until something a lot better comes along or the world finances collapses in a much bigger than the 2008 crisis which in itself was insanely high but with such a collapse the result will not be fun, yeah we will get rid of this crooked finance world however it will affect us more than it affects the bigger whale guys. Hence we should not hope for that neither.

I think the clearest choice is that we should hope that fiat is not devaluation at the same pace it has been in the past couple decades and finds a peaceful stop and try to gain value instead of losing it.

[williamweber]

I think fiat money is always needed in many transactions, even though the crypto is very convenient and very good, but the fiat money always stays as long as the government has not removed it.

[Liteoshi]

FIAT currencies are only needed by governments because they can print as they want.

The "people" don't need FIAT, I think we will be moving to a world where we trade things for other things (goods or services) and crypto is going to make this happen.

[RudeeTam]

Ah the wonders of having a unified currency all across the globe. No more exchange rates that is a pain when travelling to other countries. But it's a very long wait still since fiat is still king when it comes to accessibility. Ease of use trumps anything else.

[Macai]

As of the moment, yes it is, we can say that it is not necessary when everything is in digital ang cashless but for not many people are not yet familiar with digital money due to the fact that they don't have gadgets to use and inyernet not accessible to their places. It i still need more time to be a cashless society.