Deloitte’s new study highlighted the potential for Bitcoin ( BTC ) to be a platform from which to build a more efficient, secure and cheaper ecosystem for central bank digital currencies (CBDCs).
Deloitte’s analysis of “State-Sponsored Currency,” highlighted the need to completely redesign the traditional fiat system to address the issues of being “slow and error-prone” relative to other high-tech industries.
The report identified five areas in which Bitcoin could help traditional fiat currencies improve dramatically: speed, security and efficiency; cross-border payments; collaboration with other payment participants.
The result could be truly transformational if […] does it without the need for a central organization, federal or commercial.
Deloitte’s analysis identifies the differences between state-issued CBDCs and BTC. However, it also explains one of the key inflationary characteristics of fiat currency: CBDCs don’t have a limit on the money supply on the ledger. It states that CBDCs can be regulated by central governments to determine the CBDC’s value.
The analysis shows that the first governments to establish a nationwide CBDC will have an advantage in influencing international trades and markets by using their local currency early.
Deloitte sees crypto exchanges as being able to retain their current position as facilitators for users’ cryptocurrency to paper currency. They would then charge an exchange fee and convert the user’s cryptocurrency to paper currency.
The analysis concludes that, while CBDCs won’t replace BTC or other cryptocurrencies in a single way, their mainstreaming will allow users to choose the best medium of payment.
“[Bitcoin] could eventually spawn a series of new opportunities that transform current payments systems into one that is more efficient, safer, and cheaper to run.”
Related: The Jamaican central bank will airdrop Jam-Dex CBDC on early adopters
Although many jurisdictions are now in the race to implement CBDCs within their own jurisdictions, widespread adoption is key to its success.
Andrew Holness, Jamaica’s Prime Minister, announced that the first 100,000 Jamaican citizens who use Jam-Dex’s CBDC will receive a $16 free payment. This is in the hope of encouraging widespread adoption.
Finance Minister @NigelClarkeJa shows how he used the CBDC for his barber Paul in the #BudgetDebate2022. @CentralBankJA #JamDEx pic.twitter.com/izfRqX58Cy
— JLPJamaica (@jlpjamaica)
March 8, 2022
Cointelegraph reported that approximately 17% of Jamaica’s population is still unbanked. With the launch of CBDC the Jamaican government intends to encourage low- and middle-income residents to join the national bank system.