Coinbase COO says the major limitation of fiat currency is the system built around it

Recently, at the Money 20/20 conference, General Partner of Andreessen Horowitz, Katie Haun, was accompanied by the President and COO of Coinbase, Asiff Hirji. In the conference, the duo spoke about the importance of cryptocurrency and the opportunities it could provide to the entire world.

Katie spoke about fiat currency and the set of limitations it possessed when compared to cryptocurrency. According to Katie, the point was that it really depended on the individual who “presumably” had a bank account and identity documents, but there were two billion people in the world who lacked bank accounts or identity documents. She added:

“So what they have are smartphones and what they can’t use really are dollars. If they could use dollars, they can’t get dollars when they need them. They don’t have a place to put them and so, cryptocurrency unleashes this totally new potential.”

Asiff spoke about the cryptocurrency ecosystem and blockchain technology and elaborated on why it was better than the traditional financial system. According to him, there was nothing wrong with the “dollar bill” or fiat currency, but it was the system around it which created the problem. He added:

“Unless we’re sitting across from each other where you could just hand it to me, for an individual to send fiat currency, it’s gonna cost them somewhere between one and three percent for something very simple.”

He stated that this simple process of money transaction had become so complex and the way in which the traditional financial system was built made it “super expensive”. He added that the “friction” put into the system had made it very unreasonable. He further stated:

“There’s a reason why there are so many people who are unbanked and cannot get access to financial services.”

Asiff stated that one of Coinbase’s main agendas was to create an “open financial system” where lower costs and increased financial access was to be promoted to individuals through cryptocurrency.

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