The co-founder of the Ethereum network, Vitalik Buterin, has said that cryptocurrencies could not take over the world. Buterin noted that fiat currencies would remain the most dominant piece of finance and not crypto, as many people have alleged.
Buterin’s remarks are quite different from those shared by other cryptocurrency community members. The community has previously argued that cryptocurrencies have the potential to become supreme because of their technological prowess.
Crypto cannot overtake fiat currency
The past few months have been marked by a bearish trend in the crypto space and the entire global financial system. The ongoing war between Russia and Ukraine has strained a supply chain that had not headed from the effects of the pandemic. The rising inflation is adding to the fear of worse times ahead.
The grim economic climate has led to most experts predicting that the values of national currencies like the US dollar will lose their purchasing power. This has triggered the discussion that people could turn towards alternative assets like cryptocurrencies as a store of value.
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However, Buterin begs to differ with the analogy that cryptocurrencies could one day dominate over fiat currencies. “I do not expect cryptocurrencies to take over the world. It’s about cryptos and digital and governments,” Buterin said.
This is not the first time that the Ethereum co-founder is praising fiat. Before the COVID-19 pandemic, Buterin praised fiat currencies for being stable over the past decades. He added that the monetary policy was complicated adding that fiat currencies should not be criticized before people understood how they worked.
Bitcoin as an alternative to fiat
Bitcoin has been praised as a possible alternative to fiat currency because of its fixed supply. Bitcoin has a fixed supply of 21 million coins, which could help solve the i9nflation problem caused by central banks printing more bank notes.
However, not all agree that the fixed supply is good for the financial sector. Last year, the former Minister of Finance in Greece, Yanis Varoufakis, said that it would be catastrophic for Bitcoin to replace fiat currency. He added that the fixed supply would limit the central bank’s powers to increase the money supply when circumstances require this to happen.
VanEck, a digital asset manager, has previously predicted that if Bitcoin becomes a global reserve asset, its price will skyrocket to trade between $1.3 million and $4.8 million.
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