A new study by financial services giant Deloitte has highlighted the potential of Bitcoin (BTC) as the basis for creating a cheaper, faster and more secure ecosystem for electronic fiat money or central bank digital currency (CBDC). .
Deloitte To analysetitled State-Sponsored Cryptocurrency, highlighted the need for a complete overhaul of the traditional fiat ecosystem to overcome looming issues of being “slow, error-prone, and costly relative to performance in other high-tech industries.” .
However, the report highlighted five key areas where Bitcoin can help traditional fiat currency dramatically improve – speed, security, efficiency, cross-border payments, and collaboration with other payment participants:
“With the potential to […] do so without the day-to-day operational need for a centralized organization, whether commercial or federal, the result could truly be transformational.
While pointing out the various differences between BTC and state-issued CBDCs, Deloitte’s analysis reiterates one of the key inflationary traits of fiat currency, indicating that CBDCs have no cap on the money supply. contained in the ledger and that centralized governments can define the value of the CBDC. .
According to the analysis, governments that are the first to deploy a CBDC nationwide will have an early advantage in influencing the use of their local currency in international markets and trade.
In a CBDC environment, Deloitte envisions crypto exchanges retaining their current position as an enabler that will be used to convert “users’ cryptocurrency into paper currency when transacting in different currencies, and charging exchange fees in return” . In such a scenario, banks will act as distributed ledger custodians who will compete with other miners to process transactions and collect the reward.
On a final note, the analysis indicates that while CBDCs will not serve as an individual replacement for BTC and other cryptocurrencies, the integration of CBDCs will open up an additional option for users to choose the most suitable means of payment. , concluding:
“[Bitcoin] could ultimately spawn a series of new opportunities that […] transform the current payment system into a system that is faster, more secure and less expensive to manage. »
Related: Jamaican Central Bank to Release Jam-Dex CBDC to Early Adopters
While many jurisdictions have joined the race to implement in-house CBDCs, one of the key factors in its 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 receive a free payment of $16 in hopes of promoting widespread adoption.
— JLPJamaica (@jlpjamaica) March 8, 2022
As Cointelegraph reported, approximately 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 national banking system.