Deloitte has released a study emphasizing the potential of Bitcoin (BTC) as a base for creating a cheaper, faster, and more secure ecosystem for electronic fiat and central bank digital currencies (CBDCs).
The Deloitte report, “State-Sponsored Cryptocurrencies,” demonstrated the importance of rethinking the traditional fiat ecosystem to be able to overcome the impending problems of being “slow, error-prone, and costly.”
The report identifies core areas where Bitcoin can improve traditional fiat currencies drastically – security, efficiency, cross-border payments, and collaboration with other payment participants.
“With the capability to reduce operational requirements without the need of a centralized organization, whether commercial or federal, the result could be truly transformative.”
Deloitte’s analysis states the many differences between BTC and state-issued CBDCs, but it reveals one of the major inflationary traits of fiat currencies: CBDCs have no limit on the amount of currency a government is allowed to issue as well as defining the value of CBDCs.
- Based on the analysis, governments that implement a nationwide CBDC would be able to influence the use of their national currency in international markets and trades.
- According to Deloitte, crypto exchanges will continue to serve as facilitators to convert cryptocurrency to fiat currency in a CBDC environment and will charge an exchange fee.
- “In such a case, banks would be responsible for maintaining the distributed ledger and compete with other mining companies to process transactions and collect the rewards from them.’
The endnote of the analysis claims that CBDCs are not a one-to-one replacement for bitcoin and other cryptocurrencies but that their mainstreaming will offer users an additional payment option, concluding: “[Bitcoin] could create a series of opportunities that would […] speed up, secure, and reduce the costs associated with the current payment system.”
Despite the growing number of jurisdictions that have adopted in-house CBDCs, widespread adoption remains a key factor for their success.
This is basically what I have been screaming for some time, time for the CBN to do away with the “Crypto ban”, the opportunities for the Government to earn and also to tax earnings can only be achieved through an open minded approach to the possibilities.