The Many Forms of Currency

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5 min readMay 14, 2019

Technological innovations have pushed the boundaries of what we consider as currency. Aside from precious metals, our daily interactions include one or all of the following: fiat currency, digital currency, and cryptocurrency. As time moves forward, tangible money is being phased out in favor of a digital medium of exchange.

In this article we’ll take a look at what role each currency plays, how you can spend them, and analyze the relevance to our society each one has.

Fiat Currency

Fiat currency is a medium of exchange that’s produced and backed by the government that issues it — it’s what most people think of when they think of traditional “money” or “cash” like US dollars, British Pounds or Euros. In general, governments allow the printing of fiat currency to create a supply and a demand. Its value within a country generally remains the same but may fluctuate when converting to a different national currency.

Regulators for these forms of money continually print fiat to stave off an impending economic crisis.[1] This method of pushing back the coming crisis is only a band-aid in the grand scheme of economic possibilities. A crisis may be averted today, but the continuous compounding of debt from the constant printing of fiat currencies will eventually come to a head.

How We Use Fiat Currency

Depending on where you live in the world, fiat currency is a popular choice. Most, if not all, underdeveloped nations rely on tangible money to buy and sell goods. In contrast, many technologically advanced countries are rapidly integrating cashless methods for payment in day-to-day transactions.

Fiat currencies are looked down upon by regulators because it’s more difficult to track and trace payments sent and received by traditional cash. This means that it’s more difficult to regulate, and watchdogs for revenue agencies are becoming less in favor of this medium of exchange.

Although it’s a popular choice for a large portion of the world, we may soon see much less of it in circulation.

Digital Currency

Digital currency has made tremendous strides in the last few years. Smartphones have led the rise in digital wallets and peer-to-peer payment platforms such as Venmo and PayPal. These are all cashless methods, and they continue to drive the trend in the way we send and receive money.

How We Use Digital Currency

We mainly use digital currency because of its simplicity. Whether it’s in the form of a debit card or an app on your phone, it’s just easy to use. We no longer need to rush to the ATM or require change. Everything about digital currencies is seamless, and the user experience wins the day.

Whether it’s for an espresso or a big-screen TV, your digital wallet or card will do the trick. Then comes the awkward moment when you’ve finished eating at a restaurant and notice the “cash only” sign. It’s in these times that digital currencies are inflexible because you can’t create money out of thin air even though your digital account balance says otherwise.

In many developed countries, it’s common to live your life without ever needing to touch fiat currency. The convenience of putting your phone next to the point of sale device for an instant payment is hard to pass up. This streamlined form of currency has taken root in many societies and will remain relevant as long as the user experience remains applicable.

The Problem with Digital Currencies

Digital currencies are perfect — up to a point. They’re still tied to the legacy fiat currency of a specific country. Although it’s convenient to use, its reliance on the traditional network leaves it open to trouble in the event of an economic crisis.

Although digital forms of currency are experiencing broader growth, they may become a fading fad as new currencies gain wider adoption.


Cryptocurrencies have slowly but surely taken the spotlight in the world of money. These stateless coins are beholden to no one, and their value is derived from the work that computer algorithms put forth to secure their blockchain. Their ability to rapidly send payments without borders has had an impact on the financial system and institutions realize that this may be the next generation of money.

Who Uses Cryptocurrencies?

According to wallet addresses for Bitcoin, an estimated 32 million accounts exist on its blockchain.[2] This figure is skewed considering anyone can create a wallet and leave it empty. Besides Bitcoin, there are well over 2,000 cryptocurrencies and counting. Many investors hold more than one cryptocurrency, so the exact figure is difficult to estimate.

The Benefits of Cryptocurrencies

Cryptocurrencies are not centralized. This crucial aspect is the main separating force between traditional government-backed money and crypto. Instead, cryptocurrencies are decentralized, meaning they aren’t owned by a single entity.

Just as the internet forever changed traditional mail with email, cryptocurrencies are upgrading the way we send money. No longer do you need to wait for a wire transfer to clear or pay for the exorbitant fees associated with it. Crypto empowers users to transfer any sum at any time, all at a small cost.

Every piece of data that passes through the blockchain is recorded on a public distributed ledger. This ledger is the ultimate account keeper, where any transaction can be queried or traced, without the possibility of being manipulated. This makes money genuinely accountable for the first time, where fraudulent activities are able to be found with minimal effort from regulators.

The Problem with Cryptocurrencies

With so many positive aspects, it’s hard to imagine any adverse facts about cryptocurrencies. The glaring problem with crypto is that it’s still in a very speculative stage. Prices fluctuate heavily by the day, as each crypto is tradable 24/7. This makes it hard to use as a form of spendable cash.

Since cryptocurrencies and blockchain technology are still very young, many users don’t fully understand how to protect themselves from malicious actors. The ecosystem is rife with scam artists, so trust is another issue.

Until more meaningful adoption occurs with cryptocurrencies, this form of payment is still a few years away from impacting our lives the way traditional forms of currency have.

Merging the Best of Both Worlds

KABN realized that cryptocurrency users need a platform to turn their digital tokens into a spendable form of cash. That’s why we are launching our crypto-linked Pegasus Flyte card with Visa — it can be accepted around the world wherever Visa is accepted. Our platform highlights the accountability of blockchain while simultaneously giving you direct access to real-world goods. Understanding the limitations and benefits of traditional fiat and cryptocurrencies enabled us to build an ideal platform that conveniently merges the old with the best of the new.





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