A Detailed Dive Into Stablecoins #017

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Hello great minds,

It is another beautiful day and I feel happy to come before you all today to discuss on an issue of great importance in the cryptospace.

I trust you are all doing perfectly fine and are enjoying your activities in the community as we actively engage with one another.

Today, we shall continue our discussion on stablecoins and here, we shall b discussing briefly on the advantages of fiat currency.

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ADVANTAGES OF FIAT CURRENCY

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There are several advantages of fiat currency in the world we live in today.

And continuing from where we stopped in our last discussion, we learnt a bit about monetary policy and we shall learn more today.

• MONETARY POLICY

In our last discussion, we learnt about monetary policy and we understood that it is a major advantage of flat currency.

Let's consider some more ways in which monetary policy pose to be an advantage of fiat currency.

GLOBAL RESERVE CURRENCY

The reserve of fiat currency is being held by various countries, typically the us.dollar and this is being held so as to facilitate investment or international trades.

This status as a global reserve currency provides a major benefit of enhancing financial stability and it also provide a huge advantage in line with global economic influence.

SEIGNIORAGE

Seigniorage provides a huge benefits to the government, they profit a lot from issuing currency.

When money is created, then revenue is easily generated without the rise of taxes.

And this is a valuable method of making money, it is a good source of income.

MONETARY POLICY TRANSMISSION

Fiat currency is very important in the transmission of monetary policy.

Lending rates is most often times influenced by changes in the policy rate and money supply, and this inturn, has a huge effect in spending investment and in the economic activities in the nation

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CONCLUSION

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An Important role is being played by fiat currency in modern monetary policy.

It's adaptability, control and flexibility allows the government and the central banks to grab a wide range of policy objectives, from economic growth and price stability to financial system stability.

With some challenges and risks, fiat currency continue to be a cornerstone of contemporary monetary system, and a strong tool that can be used to control the economic landscape.

We have come to the end of this section of our discussions, we shall continue in our next discuss.