Bitcoin Well Positioned To Help Governments Create Cheaper CBDCs: Deloitte

A new study from financial services giant Deloitte has highlighted the potential of Bitcoin (BTC) as a basis to create a cheaper, faster and more secure ecosystem for digital fiat currencies or central bank digital currencies (CBDCs).

Deloitte’s analysistitled State-Funded Cryptocurrencies, pointed to the need for a complete redesign of the traditional fiat ecosystem to overcome impending problems as “slow, error prone, and costly compared to performance in other high-tech industries”.

However, the report pointed to five key areas where Bitcoin can dramatically improve traditional fiat currencies – speed, security, efficiency, cross-border payments, and collaboration with participants. Other payment:

“With potential […] do it without the day-to-day operations for a centralized organization, whether commercial or federal, the results can be truly transformative. “

Similarities and differences between CBDC and Bitcoin. Source: Deloitte

While highlighting the various differences between BTC and state-issued CBDCs, Deloitte’s analysis reiterates one of the key inflationary characteristics of fiat currencies, stating that CBDCs have no upper limit on the money supply. Ledgers and centralized governments can determine the value of CBDCs.

According to the analysis, the first governments to roll out CBDCs nationally will have an early advantage in influencing the use of their local currencies in international markets and transactions.

In the CBDC environment, Deloitte envisions crypto exchanges that will maintain their current position as a facilitator that will be used to convert “user cryptocurrency to fiat currency when transacted over the internet.” different currencies and in exchange will charge an exchange fee.” In such a case, banks would act as custodians of the distributed ledger, who would compete with other miners to process transactions and collect rewards.

As a final note, the analysis states that while CBDCs will not act as a one-to-one replacement for BTC and other cryptocurrencies, the mainstreaming of CBDCs will open up an additional option for users to choose from. the most suitable payment facility, conclusion:

“[Bitcoin] can eventually create a new set of opportunities […] transform the existing payment system into one that runs faster, more securely and with less cost”.

Related: Jamaica Central Bank Broadcasts Jam-Dex CBDC to Early Adopters

While many jurisdictions have entered the race to implement CBDCs internally, one of the key factors for successful implementation is widespread adoption.

In this effort, Jamaican prime minister Andrew Holness announced that the first 100,000 Jamaican citizens to use the country’s CBDC, Jam-Dex, will be paid $16 for free in hopes of boosting widespread adoption. .

As Cointelegraph reported, about 17% of Jamaica’s population is still unbanked, and with the launch of the CBDC, the Jamaican government plans to encourage low- and middle-income citizens to join the banking system. nation.