Velocity of Money Analysis: Cryptocurrency, Fiat Currency, and DTAs
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Cryptocurrency
Cryptocurrencies are widely regarded as speculative assets, where holders aim to profit from price volatility rather than using them for transactions. This speculation creates a significant drag on their velocity of money, as the vast majority of users prefer to hoard rather than spend. Additionally, the lack of intrinsic value and the absence of regulation hinder their broader adoption for payments or as stable financial instruments.
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2. Fiat Currency in a Debasing National Currency Environment
Fiat currencies are especially vulnerable in environments of fiscal mismanagement. For example, the U.S. government frequently raises its debt ceiling, prompting the Federal Reserve to print more money to meet debt obligations. This devaluation stems from a lack of fiscal discipline, as Congress consistently fails to implement balanced budget measures or reduce the national debt. These actions erode trust in fiat currency and lead to asset hoarding (e.g., gold, foreign currencies) or panic-driven expenditures, drastically reducing the velocity of money in the long term and increasing economic instability.
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3. Digitized Tangible Assets (DTAs) and the Alkaimi Ecosystem
DTAs, as implemented within the Alkaimi Ecosystem, are engineered to optimize the velocity of money by tying their value to predictable streams of income, similar to savings accounts. Unlike fiat or cryptocurrencies, DTAs are backed by tangible, insured, and income-generating assets. This asset-backed design ensures intrinsic value, while the ecosystem incentivizes their use in transactions rather than hoarding. The Alkaimi Ecosystem also enforces competition among all 171 sovereign currencies on the basis of intrinsic value, exposing weaknesses in poorly managed economies and promoting fiscal responsibility globally. This combination of stable value, incentivized usage, and regulatory alignment significantly enhances monetary circulation and economic growth.​​​​
Conclusion
In conclusion, DTAs within the Alkaimi Ecosystem emerge as the superior choice. Cryptocurrencies suffer from low velocity due to speculation, while fiat currencies lose trust in environments of fiscal irresponsibility, such as repeated U.S. debt ceiling increases. DTAs, offering stable value like savings accounts, foster trust, encourage usage, and enhance economic efficiency. By promoting global competition based on intrinsic value, the Alkaimi Ecosystem ensures high levels of accountability and fiscal discipline, solidifying DTAs as the optimal solution for modern monetary systems.