I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?
That is true, that is why I don't think any decentralized cryptocurrency will ever replace the current system of fiat. Right now fiat currency is regulated by the governments but this is not for reasons that is quite easy to understand for others. A lot of people do not realize this, but if we just leave the financial system to be similar to bitcoins everything will go into chaos.
But Upto me ,Bitcoin will replace any Fiat currency. If you inverse in gold means.It will give you only time profit. But it's value of bitcoin is keeps on increasing day to day.And Central Bank will gives you ,6& 8%- interest for your holding bitcoin. But in bitcoin, the weekly profit you will get