Cryptocurrencies can help drastically improve CBDCs, Deloitte reports.
In a report, the global consulting services firm Deloitte identifies core areas where Bitcoin can improve traditional fiat currencies.
Applying Bitcoin’s innovation to the myriad issues in today’s payment ecosystem offers an exciting opportunity to build a cheaper, faster, and more secure ecosystem for electronic fiat and central bank digital currencies (CBDCs), point out a recent study by Deloitte titled “State-Sponsored Cryptocurrency: Adapting the best of Bitcoin’s Innovation to the Payments Ecosystem”.
“What would happen if we combined the best attributes of the technology of cryptocurrencies with the features of an established fiat currency under the sponsorship of a central bank?”, Deloitte’s states in its analysis. “The result very well may just be a new method of handling payments that would revolutionize the current system. With the potential to reduce costs, reduce errors, speed the transfer of money, balance privacy with anonymity, and do it without the day-to-day operational need for a centralized organization, whether commercial or federal, the result could truly be transformational.”
In particular, the report identifies five key areas where cryptocurrencies can help traditional fiat currency improve drastically: faster electronic solutions, payment security, greater efficiency, convenient, cost-effective and timely cross-border payments and collaboration with a broad array of payment participants.
“So while the scenario posed by cryptocurrencies carries challenges, it could ultimately spawn a series of new opportunities that would free up capital for more productive uses, and transform the current payments system into one that is faster, more secure, and less expensive to run” the analysis states on the end note.