On chain Fiat.
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Hi friends, how are you today?..welcome back to my blog, it's super good to be back in your faces. I trust you got value from my last post, of course I bring to you another value packed content one that I believe you would find interesting as usual.
In my last post, we explored the concept "Seed phrase" and it importance in crypto and wallet management. We would be looking at On-chain Fiat just as it has been captured up there. I would take you on the journey of absolute enlightenment, just stay with me and enjoy the ride guys!
The concept Fiat is a regular currency or that which you would like to refer to as your local currency according to your geographical location. For example we have the U.S Dollar which is the currency used in the U.S, we have Euro, Naira etc. These are all referred to as fiat and they are used as legal tenders in the region and jurisdiction that it covers.
Our emphasis today is not on the usual fiat we know, we want to consider fiat in another light, we want to discuss fiat beyond that tangible piece of paper or metal in your possession. We want to discuss fiat that are powered by Blockchain...and equally leverages on the amazing features and advantages of the blockchain system.
On-Chain Fiats are basically referred to as the digital version of traditional fiat on a blockchain technology. It functions like a stable coin which aims at stabilizing price by pegging it value. For On-chain Fiats, they are not pegged to some asset or commodity, rather, they are rather backed by reserves of the fiat currency.
The reason why they are digitalized is not far fetched. It aims to leverage on the numerous benefit of operating on a blockchain and also maintain it posture as a traditional fiat currency. In a nutshell it aims to maximize the benefit of both world, I mean a digital coin on the Blockchain and also as a traditional fiat.
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Just as I've mentioned earlier, On-Chain Fiats do not react like other coin do. They are not subject to market volatility. Their prices are stable and backed up by the reserve of the fiat it represents. So if you're looking for another class of stable coin, On-Chain fiat could be some nice consideration for you.
I know at this point, you might want to ask who uses an on chain Fiats or better put, who are those qualified to use them.
On-Chain fiat can be used by both small and big investor, ranging from individual investors to organization. It could be used by consumers and business owners for daily seem less trandactions.
Financial institution (i.e banks) and government could also use it for their governmental financial activities especially when it comes to transacting with organization on entities beyond the border of the country. Digital currency transaction travel with speed even with less transactions fee.
• Ease of Use: with fiat on crypto platforms like exchanges and the likes, one could transact freely enjoying every benefits the Blockchain system has to offer without swapping the fiat to cryptocurrency. This is really interesting.
• Volatility Risk Reduction: Here is another benefit of using On-Chain fiat. It is stable, even more than a regular cryptocurrency just like I mentioned earlier in this post, they can be viewed as another kind of stable coin backed by it own reserves and for this reason it's not subject to the volatility that plague other crypto assets.
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• Facilitate Mass Adoption: with the ease that comes with transacting using On-Chain fiat and the numerous benefit that comes with it, many folks out there who ain't really familiar with it prior to this time might want to embrace it and give it a try increasing the number of those coming into the crypto space.
• Increase in Transaction Volume: Continuous increase in transaction using On-chain fiat and mass adoption by folks out there could equally lead to increase in transaction volume within the crypto space.
I believe by now we understand what On-Chain Fiats are and their positive impact both in leveraging on the Blockchain space while retaining it nomenclature.
I trust you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.
Regards
@lhorgic♥️
https://x.com/lhorgic1/status/1809206055802732953
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