Analysis by Deloitte Shows How CBDCs Can Enhance Fiat Currencies

Deloitte’s analysis shows how Bitcoin and cryptocurrency can help improve the speed, security, and cross-border payment capabilities of fiat currency.

Deloitte, the financial services giant, recently performed a study on Bitcoin and cryptocurrency and how it affects fiat currencies. The analysis showed that crypto can serve as a foundation for cheaper, faster, and secure ecosystems for electronic fiat currencies. Additionally, cryptocurrency can also improve the state of Central Bank Digital Currencies (CBDC)

The analysis, titled “State-Sponsored Cryptocurrency”, pointed out that the traditional fiat ecosystem is in need of a complete revamp. This is because of its issues relating to low speeds, error-prone nature, and high cost relative to other high-tech industries.

According to the report, Bitcoin and crypto can help improve fiat ecosystems in several ways. For example speed, security, efficiency, cross-border payments, and collaboration with other payment participants.

The report also stated the various differences between BTC and state-issued CBDCs. Additionally, it reiterated fiat currency’s inflationary traits saying that CBDCs have no cap on the distributed ledger’s money supply. Furthermore, the report states that centralized governments can still define the value of CBDC.

According to Deloitte’s analysis, governments that adopt nationwide CBDCs sooner will have an advantage over slower governments. Early adopters can influence the use of their local currency in international markets and trades.

The report ended by stating that CBDCs will not serve as a one-to-one replacement for Bitcoin and other cryptocurrencies. Instead, it will open up an additional option for users to choose the most appropriate medium of payment.