Fiat currency is government-issued money that is used for daily transactions. Bitcoin’s software is a form of cryptocurrency, which is a digital currency not issued by a government but rather maintained in a decentralized system.
Bitcoins were first not acceptable to society. However, in recent years they have amassed immense popularity. Now bitcoins are a globally accepted form of currency transaction for certain goods and services.
Earlier if you wanted to earn bitcoins it was either through mining or by exchanging them for services or goods. However, with the recent popularity, it is becoming possible to earn bitcoins with fiat currencies.
To help promote the use of cryptocurrency various platforms have allowed for fiat gateways. Fiat gateways are nothing but a payment gateway allowing you to buy cryptocurrency using your fiat money.
Let us consider an example, where you go to an arcade and play games to win tokens so that you can buy the prize items. The value of the items is expressed in the number of tokens that you earn at the arcade. Therefore, fiat gateways act the same. So, exchanging your fiat money is possible through these gateways for bitcoin.
Such fiat gateways also help in ascertaining the value of cryptocurrencies in fiat money. So, it enables you to take well-informed decision when you are opting for bitcoin investment. However, as new currencies are being developed it is very important to associate bitcoin with the most acceptable fiat currency. Let us have a look at the top fiat currencies used to trade bitcoins.
United States Dollar (USD)
When it comes to bitcoin trading, USD is the most used fiat money. They make up for about 85.5% of the market share. Therefore, if you are still deciding which fiat currency would be best for bitcoin trading you should look no further.
Moreover, the United States was one of the first countries to adopt cryptocurrency technology. Hence, most people prefer using US dollars as the laws revolving around cryptocurrencies are friendlier.
Many nations are still not crypto-friendly and may even lead to several severe legal implications should you choose to trade bitcoins in fiat currency. So, if you are looking at trading bitcoins and your fiat currency does not support you can first convert it to US dollars and then further into bitcoins for trading.
Japanese Yen (JPY)
The next most popular fiat currency is the Japanese Yen (JPY). Even though it is not the most fiat currency for trading in bitcoins it still makes up about 5% of the trading market share. One of the reasons Japan made it to the list is because of its early adoption strategy. They were ahead of most countries in the Asian market. However, Chinese government has issued several bans on bitcoin exchange since 2017. This has made Japan the leader in the Asian market.
The European market share accounts for about 4.75% trading share. This also indicates that people prefer USD and JPY over Euros to trade for bitcoins. The sole reason why we do not find Euros higher on the list is that the trading has been very region-specific.
Korean won (KRW)
The Korean market accounts for about 3.2% of the entire market share. They rank fourth in the list because the government does not allow for setting up anonymous accounts to trade cryptocurrencies. Some might believe that for security reasons this is the right approach. however, the main idea of using cryptocurrencies is anonymity. If this anonymity then the whole point of shifting to digit currency does not make sense. Hence, to go over the system most people use different fiat currencies reducing the Korean market share.
Some common fiat gateways are using credit or debit cards for converting fiat currency to bitcoins. Some people also use third-party options including those such as e-wallets. Some crypto trading platforms also offer users the chance to engage in P2P trading, where you can buy bitcoins from other users. While there are many dangers involved in uploading your information to third-party trading websites with the help of the Bitcoin Era you can put your mind at ease.
Therefore, as you can see that a country’s regulation on cryptocurrency greatly affects the way cryptocurrency is traded in the country.