When Bitcoin reached all-time highs of almost $20,000 during the peak of the bull market in 2017, the nature of the crypto market changed. Many new users want cryptocurrency as a means of investment, speculation, or payment and are looking for ways to exchange between cryptocurrency and fiat currency. Therefore, they must figure out how the exchange between the two systems works.
What is fiat money?
Fiat money refers to a currency a government declares as legal tender despite having no intrinsic value or backing. Fiat money is backed solely by trust in the state.
The idea of such a currency was not born yesterday. Even Platon believed that citizens do not need to collect and store gold or silver. He proposed the creation of a currency, the circulation of which would be limited to the state, and the inhabitants would be obliged to use this currency as a means of payment.
In the 20th century, there was an almost universal shift away from using so-called secured money in favor of fiat currencies. The gold standard has ceased to operate. The state does not limit the issue of currency. This increases the risk of hyperinflation.
True, today, central banks are vigilantly watching currencies. Their main task is to control the currency and conduct various monetary programs to ensure states’ economic growth.
There are several ways to exchange fiat money for cryptocurrency and vice versa.
Therefore, this article will look at three main methods you can use to withdraw cryptocurrencies to fiat currency (or to your local money). These methods are the safest and least costly way to exchange digital currencies for government-issued currency.
How to exchange cryptocurrency for fiat money
There are several ways to exchange cryptocurrency for fiat money. We will look at the main convenient ways to do this.
1. Cryptocurrency exchangers.
It is one of the most common ways to exchange amp to usd. These online services allow you to exchange various cryptocurrencies for fiat and vice versa. You can use bank cards or electronic payment systems. The translation is quite fast. You do not need to pass identity verification. Of the minuses, it should be noted that these services are not regulated in any way and do not have licenses. Therefore, here you can run into scammers. To prevent this, you should check the exchanger for reliability according to reviews on the Internet. You can use specialized services that provide extensive information, ratings, and reviews about cryptocurrency exchangers.
2. Cryptocurrency exchanges.
Cryptocurrency exchanges are more serious and reliable services where you can exchange cryptocurrency for fiat money. Today many large exchanges are operating worldwide, with billions in turnover and trustworthiness. It ensures maximum security of transactions. However, almost all cryptocurrency exchanges require verification with confirmation of your passport data, sending your photo, and even video. One of the largest and most reliable exchanges is Binance.
Also read: Using Stablecoins a Complete Guide
3. Electronic wallets.
One of the oldest and most famous electronic wallets, WebMoney supports the transfer and exchange of Bitcoin and Litecoin. You can transfer, replenish or exchange cryptocurrency. You can also do this in Payeer or Advcash.
We have looked at several legal ways to exchange cryptocurrencies for fiat money and vice versa like usd to ada. Of course, there are also not entirely legal schemes. We will not talk about them. And in general, due to the general desire of many states to take control of the entire crypto industry, it is unknown how legal the above methods will be in the near future.