Digital Fiat Currencies are valuable because they provide a new and alternative approach towards the existing fiat currencies. Digital Fiat currencies hold the same value as the respective fiat currency but have higher usability. Banks want an increase in the usage of DFCs so that they can cope with cryptocurrencies like Bitcoin and Etherium.
A clear picture of the impact of Central Backed Digital Currencies can be seen in the image above. In the future, DFC or Digital Fiat Currencies like USDT and BUSD, along with others, have a high usage factor.
The pros of having DFCs
There are multiple pros of Digital Fiat Currency, which will be visible once people start using them in large numbers.
- Sending fiat currency into foreign hands is not easy and requires a lot of charges. Moreover, it’s a very lengthy process. Sometimes, each bank has its own rate of conversion of foreign currency into native currency. This is where DFCs can be of high value. There is only a single value attached to a DFC, and it will be accepted by all exchanges. Also, transferring such DFCs will be pretty easy and can be done in a matter of seconds with no mediation.
- Most of the human population still works on a cash-only basis. Many merchants and vendors still work only for cash, which is where DFCs can bring major change. DFCs have a lot of potential and can be used to pay for any services. Thus, usage of DFC will convert a fiat currency user into using digital currencies.
- Transferring DFCs is a lot easier. One can pay anyone without any issues from any distance, and it won’t require much effort.
- If the central bank of a country supports a DFC, the reputation of the bank increases and it can then provide convenient methods of payment for its customers without any issues.
The cons of having DFCs
There are manycons of using DFCs too, which need to be taken care of before one gets involved in using DFCs.
- If a person uses DFCs provided and supported by the government, privacy will be lost. This is because the banks will be given the authority to look into the transaction details of any customer. The bank can look into the wallets they have sent these DFCs into and easily measure their wealth.
- The people who know little about exchanges or DFCs will eventually get threatened by hackers. Hackers can get into their wallets using phishing and other methods. There is no formal education in the current market regarding crypto, and people will have to look into technicalities to save themselves from such attacks.
- There is a process that has been described for payments across borders so that illegitimate activities are put on hold. With the introduction of DFCs, there is a high possibility that the entire structure of processing payments, using DFCs, can be damaged.
Aurix Supports DFCs
Aurix supports all the major DFCs, and more will be added as soon as the demands arise. Presently, there are plenty of cryptocurrencies that the platform supports . Aurix CEO, Majed Mohsen, understands the importance of the presence of liquid crypto pairs that can be easily traded or sent to any wallet.
For this reason, Aurix supports a lot of DFCs and with its strong security and user-friendly nature,even those who have little experience in the world of crypto can use it.