Bitcoin Could Form the Backbone for CBDCs

Even if Bitcoin is a topic of concern about its viability as an environmentally friendly cryptocurrency, a new report by Deloitte says that the world's most valuable cryptocurrency has the potential to be the backbone of the Central Bank Digital Currency (CBDC).

According to a report titled StateSponsored Cryptocurrency, the CBDC will need to redesign its traditional financial ecosystem and Bitcoin can be helpful in five key areas, speed, security, efficiency, cross-border payments, and collaboration with other participants.

The report also points out that the first government to introduce the CBDC will have advantages in using currencies in the international market. It was also pointed out that Bitcoin is not affected in the same way by inflation as fiat currencies do.

So far, most central banks have not mentioned Bitcoin when it comes to issuing CBDCs. Countries such as India and the United States of America (USA) are currently exploring the possibility of issuing a CBDC.