Hello,
1. Yes, this is possible. If a user has sold some of their crypto via the Exchange extension for fiat, they could use that balance to buy goods on your shop.
2. This is not currently possible, because the ShapeShift extension needs to be updated or replaced after the recent changes to the platform. This is my highest priority right now and a solution will be provided soon.
3. No. If you are writing your own PHP code, you can initiate an internal transfer of fiat currencies from one user to another. This is not available via the UI or admin screens.
Fiat currencies were introduced primarily for the Exchange extension.
with regards