Topic: Maybe Not Possible For Governments To Get Off Fiat?? - page 2. (Read 424 times)

Economic power will decide everything, the EU is a powerful and united bloc, but their mistake is being too dependent on the US not only economically but also militarily. It's really a pity for them. Since the outbreak of war, they started trying to reduce their energy dependence on Russia, but they ended up falling into the US trap when they were buying LNG from the US at 3 to 4 times the market price. It can be said that the EU economy is more dependent on the US than ever, and that is what the US wants, and they have succeeded. As long as the West relies on the US, the Euro will never surpass the USD.

Fiat money means two things: fractional reserve banking and money printing.
Fractional reserve banking is the main reason why the global economy kept growing with high rates in the last several decades.
Moving to a currency with a limited supply would mean the end of money printing, which means that the economies won't be running on steroids anymore and the artificial economic growth will become a thing from the past. That's why no politician or banker wants to dump fiat money.
Your example with Canada isn't good, because Canada is totally economically dependent from the USA, when it comes to exporting goods.
Other countries(like China, Russia and India) are way less dependent from the USA and they could easily dump the US dollar.

In reality most "fiat" currency is just stored electronically anyway, the amount of notes and coins in circulation in miniscule in comparison. It's effectively much more advanced in how it is stored and manage than most cryptocurrency can claim to be - crypto primarily has the advantage that it is decentralized. In the end governments do this because it has been found the best and most effective solution to peoples inherent need to trade. It's nothing to do with whether they can "get off it", it does the job it's meant to do very well and the free market dictates the rest. Just like we saw a flight from cash during Covid, when there were less people out shopping and a bit of a stigma on passing around objects which could host the virus, the need for physical cash and the transfer to more online finances increased.

In terms of the global financial system, numerous political decisions are being made that the general public is unaware of. The US dollar will remain the most extensively used currency for international transactions for some time, requiring a total change before being swapped to another currency. The world's financial power is shifting and can shift in any direction.

In this process, top countries are always favored, while lower countries follow suit because they believe they cannot exist without the assistance of the top countries. More nations have been harmed by financial dependency than have risen above their world standing.

Never say never. In Europe many countries replaced their native currencies with the Euro, which they had no control over. They gave up the control over the currency to the EU.


Don't mix things up. KYC has very little to do with control. It's a data gathering tool.
No crypto users have to undergo KYC. For now it's still your choice if you want it or not and even if you choose to do it, nobody is taking away your bitcoin... yet.
It's possible for governments to ditch fiat money. Money printing is not a requirement for a stable economy. It's just that old habits die hard.

The government will never replace fiat currency that they released and have full control by any decentralized currency.  One major reason is the control factor.  We all know that the government always wanted to have authority over their jurisdiction and replacing fiat currency by Bitcoin will go against their authority.

Just look at how these governments trying to control decentralized cryptocurrency, they implement all kinds of regulation under the guise of anti-money laundering and make KYC on  centralized financial services mandatory.  They do this to make sure that they can have someone to collect and hand them personal data of people if they need it.

If the question is like that, I don't think fiat needs to be removed and is still needed,
after all fiat value is determined by the stability of the economy and government,
obviously I don't think fiat should be done away with.

Then it can be considered as alternate currency if the current currency couldn't be replaced. But if that's the case and many people much recognized the alternate currency then it would have impact the country's economy. That's why until now only few countries acknowledged the existing alternate currency for example like Bitcoin. US is considered as universal trading money as a lot of country has a reserved dollars. But for sure they couldn't get off fiat as their economy is stable and as I said it might impact the fiat's value and ruin the economy. They actually recognized crypto and blockchain technology they're already opened to it since a lot of people much prefer the alt currency since it's more convenient.

Arguably, the difficulty of governments getting out of the fiat system has something to do with the stability and globality of today's financial systems. However, it cannot be asserted that having other countries block other governments from wanting to change the financial system would be a case of intimidation from more dominant states. Governments have the right to make their own decisions about their financial systems, and changing this system can depend on many factors such as the political will and economic capabilities of those countries.

The rise of the renminbi (CNY) is a remarkable trend in the world financial market. China's impressive economic growth and its easy monetary policy have helped the CNY increase its value in the international market. However, it should also be noted that the rise of the CNY also brings with it some risks and challenges. One of those challenges is the competition with the USD in becoming the world reserve currency. In addition, coming up with timely and effective economic and monetary policies is a challenge for the Chinese government. Going forward, China's continued economic and financial development will be an important factor in determining the solidity and potential of the CNY. However, with impressive growth in recent years, the CNY is likely to become an attractive option for investors and businesses globally.

If a country can get rid of dependence on economic cooperation with other countries, of course they can change the financial system.
But does fiat really need to get rid of, while a function of fiat is a representation of a country's economic system. I mean in terms of price, the government always does its best to beat other currencies including changing or revising the economic system.

Yes I think that there would be a lot of consequences and intimidation for countries to try and stop using fiat money. There are two types of countries in the world, net export and net important country. Which basically means that some countries consume more than they produce and others that produce more than they consume. USA is a good example for a country that imports more, which gives them a lot of power. In the past most of that International trade was settled in USD and if one of the trading partners would move away from USD now, then the USA could try and switch to a different country for it's imports. Most products are not only offered by one country and if your economy relies heavily on its export to function, then you are dependent on the big countries. That's why I don't expect we are going to see any of the big countries to switch out of the fiat system anytime soon.

Yes, this is intimidation to other countries that is trying to make their fiat currency popular than USD which many countries of the world are used to in terms of international transaction. During the war that came up between Russia and Ukraine that made China and other countries to force their international investors to be more focus on their currency than USD which is a sign that it will not be possible for government to value other currency than her own currency no matter how favourable that currency is to them. But it will be difficult for China and other countries trying to make their currencies more popular than USD because, many foreigners investors are used to dollar for a long time in their business activities.

It's true, but we still don't know what BRICS countries will do to USD in the future. China want to replace USD with Yuan, but it's rejected by many governments. With the help of other 4 countries e.g. Brazil, Russia, India and South Africa, there's a chance USD can be replaced with their new money. Russia and India are big countries, so US and it's territories should be careful.

I still wondering why Euros are smaller than USD and Yuan, it's accepted by many developed countries.

I am pretty sure that its nearly impossible to totally ditch fiat money as there are many great stable fiat currencies. Swiss Franc and Euro would obviously replace United States Dollar if such things happened. So Bitcoin would still stay as alternative currency. Current monetary system is all about creating debt and buying now for selling future. Its inflationary because governments want it to stay inflationary. In long run, there could be different but not exactly as alternative, methods may become popular. (Gold money etc)

Isn't local fiats beneficial to its governments? Governments want to have a grip on their countries as much as possible. So replacing a local fiat with bitcoin is very hard to imagine. Maybe restore gold as the standard form when it comes to the issuance of fiat supply per country? The United States is the most powerful country and due to its influence, it is successful in making its local fiat the international standard currency. It would be hard to drop the US dollar as an international trade standard due to politics unless you are an enemy of the US or you are on the side of China and Russia. 

It's not a political issue, it's just competition in the market. Everyone wants to be the world's head and center, and that's what's going on between the US, China, and Russia. The USA has been at the top of the world for more than 100 years, and it is time for them to give up that position to the stronger in the same way they overtook Britain 100 years ago. The revolution of eliminating the USD, and reducing dependence on it is taking place, although there is no guarantee of success, but it shows that USD has started to have many problems.

Canada is a country where it has a good relation with US and Canada is also strict as US.

China and Russia are have politics problem with US and it's territories, that's make China and Russia are possible to get off from USD because there's no reason for them to use USD.

Even USD is a global reserve currency, but don't forget China is so quite big and their economy are leading too.

This statement is contradictory in a sense because there won't be an emergence if you don't replace the existing one although I do agree with the part about it being unlikely. The government wouldn't easily replace fiat even if they want to, that would be a nightmare especially for countries like US, they are a reserve currency for many countries so they can't just replace their money easily, that's why they still use cotton in their currency and not polymer.

The transition to a monetary system with a more limited supply for states is absolutely unacceptable. It is impossible to try to transfer the principles of operation of the cryptocurrency to the fiat system of states. The amount of fiat in the state should be generally equal to the amount of material assets that can be in circulation on the territory of the state. Any deviation causes negative consequences for the economy of states.
The transition to the fiat of another state or to cryptocurrency also negatively affects the economy of the state.

I believe you are referring to the global trades? If yes, things are going to change sooner than later. Multiple countries have already signed agreements to use their own money for international trade. One of the most recent one is Saudi Arabia to stop using USD for their trades.

https://www.cryptopolitan.com/saudi-arabia-cuts-ties-with-united-states/

That's an alarm for the US government. So the debate here is not to change the financial system out of fiat. Fiat will remain as it is. But the dependency on the US dollar is going to decrease which will decrease the Purchasing Power of USD. It may change if US decides to attack middle east again for no reason!