One of the world’s largest accounting firms says the technology behind Bitcoin (BTC) is a good starting point for developing an effective central bank digital currency (CBDC).
According to a new report from British accounting giant Deloitte, blockchain-based cryptocurrencies have attributes that, combined with the properties of fiat currencies, could result in state-of-the-art state-backed digital assets.
“What if we combined the best attributes of cryptocurrency technology with the characteristics of a fiat currency established under the sponsorship of a central bank? The result could very well be a new method of processing payments which would revolutionize the current system.
With the potential to cut costs, reduce errors, speed up money transfer, balance privacy with anonymity, and do it without the day-to-day operational need for a centralized organization, be it commercial or federal, the result could truly be transformational.
Such a system would have to have important roles for banks…and it would need full central bank approval.
Deloitte points to the inner workings of Bitcoin as a framework that central banks could use to bolster the usefulness of CBDCs.
“The basis for a state-sponsored cryptocurrency would be much like Bitcoin – individuals or businesses would use computer-generated public “addresses” to send and receive payments.
Payers could use an e-wallet on a smartphone or computer to send money to recipients’ public addresses. Unlike Bitcoin’s current system, however, banks and other financial institutions, previously approved by the central bank, would be the custodians of a shared and distributed system. [blockchain].”
Bitcoin is changing hands at $41,422 at the time of writing, down almost 1% on the day.
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