Will stablecoins replace Fiat currencies in the future?

[Abiky]

Stablecoins are crypto assets pegged to the value of Fiat, bringing people the "best of both worlds". The most popular stablecoins are often pegged to the US Dollar, since it's the world's reserve currency. Some of them comply with regulations, further legitimizing the industry as we speak. With all of the benefits stablecoins provide, Fiat's prominence could be threatened in the long run. After all, it's much faster and cheaper to use a stablecoin than a credit/debit card. People could stop using Fiat currencies like the US Dollar or the Euro in exchange for a stablecoin of their choice.

This makes me wonder, will stablecoins replace Fiat currencies in the future? If not, why? Is there a possibility governments will adopt stablecoins as their own instead of launching digital currencies from scratch? Your input will be greatly appreciated. Thanks in advance.

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[Bttzed03]

This makes me wonder, will stablecoins replace Fiat currencies in the future? If not, why?

It will only replace fiat IF the government will take full ownership of the company minting/burning these stable coins. We're talking about a legal tender here and not investment assets like BTC that can be regulated (using exchanges). They must have full control.

Is there a possibility governments will adopt stablecoins as their own instead of launching digital currencies from scratch?

We've already heard of China with their own CBDC and other countries are planning/developing their own.

[DaMut]

It will only replace fiat IF the government will take full ownership of the company minting/burning these stable coins. We're talking about a legal tender here and not investment assets like BTC that can be regulated (using exchanges). They must have full control.

It is true but again can it be considered as stablecoin if the government take its full ownership? I guess no, the characteristic of stablecoin is its reserve asset which is fiat. without its reserve asset, it does not fit to be called stablecoin instead it will become another fiat.
given that fact, I highly doubt stablecoin will replace fiat. it will coexist as it is now.

[Scripture]

There's a lot of topics before that tackles about cryptocurrency replacing fiat money which I still believe that it wont happen even if we introduce the most stablecoins because the government wont allow this kind of network, there's no secret money here and this is a big NO for the government so this wont happen.

[BITCOIN4X]

Any country that agree with crypto technology will consider printing their own stablecoin as a fiat alternative. The growing adoption and knowledge of crypto in society will really help bring this idea to fruition, but I'm not sure if there are many people interested in having a centralized crypto asset. I am sure the government has been thinking about this opportunity for a long time, but it need special consideration and must get support from all sectors. Fiat will continue to exist even if stablecoin are created.

[Mauser]

This makes me wonder, will stablecoins replace Fiat currencies in the future? If not, why? Is there a possibility governments will adopt stablecoins as their own instead of launching digital currencies from scratch? Your input will be greatly appreciated. Thanks in advance.

I don't think this going to be very likely. While many people are investing in stablecoins and find them very attractive, the governments will be very reluctant to give away all their power easily. We know that the digitial USD and EUR are coming, so it seems more likely that the central banks are going to push and promote their own currencies. Having full control over the money supply and being able to print more money whenevery they please is the key to financial policies in todays world.

[masterrex]

IMHO, I think it won't replace fiat even in the future, but what I believe is fiat and Stablecoin can co-exist together in the future because fiat was the government own and introduce currency thats why it's not that easy to replace while Stablecoins are cryptocurrencies that working on different blockchains it's completely different in terms of technological application but both fiat and crypto Stablecoin are meant for financial services and usage.

[rozak]

FIAT's functionality as a digital payment instrument is already happening. although what is happening now is to transfer FIAT from one bank to another bank. or from one address to another.
stable crypto as a payment realm is very possible, but to replace FIAT in the future will take a long time depending on market acceptance and crypto users.
Currently, fiat is still considered the easiest and legal transaction tool.

[Johnyz]

There's no way to replace Fiat currency this may be old but it is still functioning, not unless we goes to full digital like everyone uses digital money. We have to accept this fact, cryptocurrency was not made to totally replace fiat money, it was made to provide greater options to people and I'm sure every country wont allow this to happen, banks also have the same perspective. Cryptocurrency will be better in time, and the adoption will start to happen but still there's no chance that it can replace fiat.

[isaac_clarke22]

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I have mixed feelings about this.
I mean we already have credit/debit cards that could almost do the same in transaction but still people continue to use fiat currency most of the time.

There's high possibility that government will adopt stablecoins but it won't replace their regulated currencies, as people got used to it already.
Not everybody have the proper education to even use technologies properly, considering how many people from US/UK get scammed by tech supports by telling them random stuffs that don't even make sense and slapping it as a "technological term", although I might be going a bit off-topic here.

[Bttzed03]

It will only replace fiat IF the government will take full ownership of the company minting/burning these stable coins. We're talking about a legal tender here and not investment assets like BTC that can be regulated (using exchanges). They must have full control.

It is true but again can it be considered as stablecoin if the government take its full ownership? I guess no, the characteristic of stablecoin is its reserve asset which is fiat. without its reserve asset, it does not fit to be called stablecoin instead it will become another fiat.

Are you seriously asking if the government have fiat (and other liquid assets) to back up each unit of stable coin? Where do you think these companies got their reserves from? It's from the same government that can easily print trillions of fiat in an instant.

[MishaSER]

It will only replace fiat IF the government will take full ownership of the company minting/burning these stable coins. We're talking about a legal tender here and not investment assets like BTC that can be regulated (using exchanges). They must have full control.

It is true but again can it be considered as stablecoin if the government take its full ownership? I guess no, the characteristic of stablecoin is its reserve asset which is fiat. without its reserve asset, it does not fit to be called stablecoin instead it will become another fiat.

Are you seriously asking if the government have fiat (and other liquid assets) to back up each unit of stable coin? Where do you think these companies got their reserves from? It's from the same government that can easily print trillions of fiat in an instant.

Really? Do you think that they don't do that in cryptocurrency? For example, take the USDT token, how many tokens have already been issued without any collateral, each time being in the center of scandals, but this does not prevent them from being number 1 among stablecoins.

[Bttzed03]

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Really? Do you think that they don't do that in cryptocurrency? For example, take the USDT token, how many tokens have already been issued without any collateral, each time being in the center of scandals, but this does not prevent them from being number 1 among stablecoins.

Who are you asking?

[DaMut]

Are you seriously asking if the government have fiat (and other liquid assets) to back up each unit of stable coin? Where do you think these companies got their reserves from? It's from the same government that can easily print trillions of fiat in an instant.

We are talking about replacing the fiat which means stablecoin becomes the next fiat.
do you think fiat will still exist once stablecoin replaces it? I am asking you, what is the different between fiat and stablecoin?
we can speculate they do not have enough reserve to back up each unit of stablecoin but that does not mean they do not have any liquid assets at all. how can it be called as stablecoin if it does not have a target price?

[TastyChillySauce00]

CBDC that's released by central bank and approved by the governments maybe, but a stablecoin that's run by a private company I very doubt so, the government if feel threatened could easily ban the stablecoin and it's already unusable in that specific country. It's just overall very hard for a stablecoin to "simply" replace fiat due to regulatory problem but if it's to be used internationally as an alternative, maybe.

[int03h]

Stable coins are deposited by FIATs in banks and help value Stable coins. If one-day stable coins replace FIAT, what will be the role of banks? I think that currently, the relationship between stable coin and FIAT is very suitable. Everything will go on until governments make an official announcement about crypto issues.

[asriloni]

The government will prefer to issue their own stable coin called CBDC, I should remind you that there are some news that said if some countries were feeling worrying of stable coin will be dominating the world and that's why UK wants to clear the stable coin regulation as fast as possible. Stable coin has possibility to replace fiat as it has the same value caused by stable coin pegged with fiat.

I recommend you try to read some news about stable coin regulation. So many countries are paying their attention on this.

[semobo]

Nope, they will never replace fiat because the value of stable coins itself pegged with the fist money means they need fiat money for those stable coins to exists. And also governments has no reason to accept stable coins over their fiat money because there is no difference other than the blockchain technology.

Why government needs to give control of their fiat money to a private company?

[Kabul]

Regulations or legitimation does not change the fact that they are based on USD. As long as they are backed by USD, they can't replace USD. Government will never let this phenomenon to happen.

Moreover, crypto users love to avoid paying taxes or become anonymous. If stablecoins replace Fiat, there will be a rule which centralized the whole market and perhaps real crypto enthusiasts will abandon stablecoin forever. Diversity is necessary for further development

[Bttzed03]

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We are talking about replacing the fiat which means stablecoin becomes the next fiat.

It's stable coin replacing the fiat as a currency/countries legal tender/preferred medium of exchange.

do you think fiat will still exist once stablecoin replaces it?

Fiat can act as a reserve. In a way, each stable coin is backed up by the Government that issued it if it will remain pegged to fiat.

how can it be called as stablecoin if it does not have a target price?

Don't limit it to fiat like USD. Apart from what I said above, stable coins can also be pegged with minerals. It can be valued as xx ounce of (name of mineral).