Page 116 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) .indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
students of the Institute. The Chief Guest and transaction. The distinguishing features of the
the Speaker for the webinar was Shri Vikas Fiat are Durability, Portability, Divisibility,
Babu, Deputy General Manager of Treasury, Uniformity, Limited Supply and Fungibility.
Union Bank of India. It was also graced by Although Fiat Currency continues to facilitate
Shri Syamal Ghosh Ray, Advisor of the BFSI nearly every transaction on the planet,
Board. the concept of money continues to evolve.
Since emerging in the 11th century, Fiat has
He deliberated the following aspects in details remained the dominant mode of transaction
and the objective of the webinar is to determine despite facilitating crucial economic crises. As
what is fiat currency? What is cryptocurrency monetary crises and inflation remain major
and the underlying technology and what is
economic issues around the world, consumers
Central Bank Digital Currency? In the way desire for money that is not controlled by the
that the modern man had evolved from the Centralized Institutions which(to be deleted)
stone age to the modern industrial age, in the has grown up recently. The transition was
similar manner our transactions also have kicked off due to the erosion of trust in Banks/
followed the similar line. Initially the barter
Financial Institutions following the 2008
transaction was prevailing, after that money or Financial Crises in which the Government
rather money for goods came into prevailing used trillions of dollars to bail out the very
practice for ease of transactions. Subsequently, financial Institutions that were the cause of the
with the nationalization of currencies and crisis. Furthermore, emergence of Blockchain
Internationalization of Trade we had beginning
technology and cryptocurrencies are laying the
of Forex markets and now evolving into crypto groundwork for the next generation of money.
markets (crypto for money / goods / crypto).
In the earliest eras of civilization, societies A cryptocurrency is a form of virtual/ Digital
denominated money in livestock. Then cowrie currency that is secured by cryptography,
shells from the Pacific and the Indian oceans, based on a network that is distributed
salt etc. saw the widespread use as form of across a large number of computers. Most
money. Then it gave way to the more familiar cryptocurrencies are decentralized networks
form of precious metal coinage. Today, Fiat which allows participants to enforce the
Money represents the money. Fiat is physical rules of the system in an automated, trustless
money and legal tender which is backed by fashion. A defining feature of cryptocurrencies
a nation’s Government. It has the backing is that they are generally not issued by any
of the sovereign Government. Fiat money Central authority, rendering them theoretically
lacks intrinsic value, however it derives its immune to Government/ Central Authorities
worth as legal tender which is issued by the interference or manipulation and offer
Central Bank which is in turned backed by the significant opportunities for financial inclusion
Government. As long as money operates as a around the globe. Blockchain is the name of the
medium of exchange, store of value and unit of new technology on which crypto is formed.
account, it will be valuable. Consumers need to Blockchain is an incorruptible ledger of
know that they can easily purchase goods and economic transactions that can be programmed
services they need, as well as it will retain value to record not just financial transactions but
over a reasonably long period and it presents a everything of value.
way of measuring the value of every economic

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