Battle of the Currencies: Crypto or Printed

Cryptocurrencies have become one of the most popular investments in the past few years, with around 14% of American adults trading them in some form this year. On the contrary, the value of the dollar has fluctuated greatly, including in late October when it weakened against the Canadian dollar, Japanese Yen, and Euro. These concerning trends raise the question: Can cryptocurrency replace the dollar in its traditional paper currency?

Cryptocurrency, like the dollar or Euro, is a medium for monetary transactions but exists in a digital, encrypted form which makes it impossible to counterfeit. Kentucky Senator Rand Paul (R) further speculated on the idea that cryptocurrency could potentially replace the dollar: “I’ve started to question now whether or not cryptocurrency could actually become the reserve currency of the world as more and more people lose confidence in government.” A major politician speaking out on this matter proves that its potential role in society is worth paying attention to. 

There are both benefits and risks associated with the rise of crypto. One of the biggest positives would be a much more efficient online trading system, leading to lower transaction costs and quicker processing. The progression further into electronic purchasing makes this perhaps the most compelling pro-crypto argument. Additionally, cryptocurrency would allow for easier monetary conversions than the dollar, even though the dollar is already frequently used in international reserves for cross-currency transactions. 

While there are many points to be considered on both sides, it is highly unlikely for crypto to replace the dollar anytime soon. A switch to cryptocurrency would be one of the most drastic changes in the history of economics, and the objection to the idea alone would make the push for the switch seemingly impossible. However, we must not ignore the conceptual flaws that come with harboring cryptocurrency as a main form of money. Crypto is here to stay, but we are still finding out in what capacity.