Some heavy hitters say the answer is no.

A fiat currency derives its worth from the issuing government - it is not fixed in value to any objective standard. That means central banks can print as much money as they want. If an economy is struggling, injecting more notes into the system juices activity but lowers the value of the currency in question.

With major central banks all desperate to stimulate their economies, some say currencies have entered a dangerous new phase often described as a race to the bottom.

Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, says investors will soon start to demand fiat currencies be backed by gold or other hard assets.

“It's already happening, you're beginning to see that trend with central banks stocking up on gold. The estimate is that at least half of the buying is central bank buying. They are looking to the day when they can say okay, our currency is backed by gold and therefore we're a strong country,” Mobius told CNBC Asia.

Mobius has $50 billion under management.

Yu-Dee Chang, Chief Advisor at ACE Investment Strategists, says repeated stimulus is shortsighted. “If you keep printing money, sooner or later, we're going to get in trouble. QE is good for the economy and for the market but the long-term effect is very much questionable,” said Chang.

But not everyone thinks fiat currencies are approaching their demise. Sean Callow, Senior Currency Strategist at Westpac Bank, says if there was going to be a melt-down, it would have happened by now.

“The bond market vigilantes have had every chance to punish the U.S. for its huge fiscal deficits. The markets are confident in these currencies - the U.S. dollar , the pound , and the yen in particular. That's where the balance sheet expansion has occurred and yet those currencies have held up pretty well over the past couple of years,” said Callow.

The fiat bears admit it is impossible to predict when cracks will start to appear in the current system. Some say it could happen within five years. Mobius thinks things may start to unravel much sooner.

"It's hard to say. It could happen tomorrow. It could be very very quick. A lot depends on the moves by the reformists - not only in Europe, but in the U.S. and Japan. This is all about confidence. If the confidence is gone, no piece of paper is worth anything," said Mobius.



As the fiat currency debate gains momentum and relevance, one London-based manager of a billion dollar fund says the answer about what lies ahead is in the past.



“Every single fiat currency in history has collapsed, this time will be no different.”

Follow Lisa Oake on Twitter: @LisaCNBC