There is a constant buzz surrounding the evolution of central bank national currencies into their digitized versions. During the economic depression back in 2008, governments started considering the path to cashless methods of transactions. Furthermore, they thought of a way to prevent economic crippling in case of a global crisis.
A blockchain enthusiast under the pseudonym Satoshi Nakamoto released the Bitcoin whitepaper introducing cryptos to the market. These forms of cash exist independently from the central banks. Likewise, this option was fast and nearly costless while anyone with a phone or computer and internet connection could transact.
Better still, it facilitated worldwide transactions in minutes. Cryptocurrencies, over the years, have become an alternative for financial investments, especially in regions with unstable regimes. Besides bitcoin, there are over 6,000 more cryptos in the market and still growing.
What are Central Bank Digital Currencies?
December 2019 issued the world with another situation that necessitated quick actions. The coronavirus renders cash as an inappropriate and unsafe method of transaction.
Currently, there are limitations of exchanges worldwide as far as trade is concerned. Governments hold onto the last slivers of hope to keep going even though debts are becoming an issue. Governments and their central banks now needed to evaluate possible solutions out of this quicksand. In turn, people revived the idea behind central bank digital currencies (CBDCs) as a way out of the current and future crises.
Considering that most nations lack regulations or have strict rules concerning cryptos, CBDCs will help everyone win the game. A single CBDC token would stand for an equivalent value of a national currency bill. Each carries unique serial numbers, and blockchain technology would help in transparent transactions. Additionally, they will be a secure and cheaper form of handling monetary proceedings reducing costs in minting and avoiding double-spending.
In terms of convenience, CBDCs will offer governments and citizens alike the opportunity to exchange national currencies across borders with minimal fees. It would also benefit the unbanked since they would only need access to mobile phones to access banking and other financial services. Last, yet importantly, CBDCs are under regulations of central bank systems, however, employing decentralization.
Where does the National Payment Platform come in?
Apollo Fintech, a leading fintech solutions’ provider, paved the way for the first blockchain-based National Currency Platform on August 13. It enables central banks to issue and distribute a nation’s sovereign digital currency, the CBDCs. Incorporating CBDCs into the NPP system accompanies several advantages that users, both government and traders, find appropriate when undertaking transactional services:
- Fluid Transactions: linking CBDCs with Apollo Cash comes with a variety of lucrative advantages for users. One of them is that the processing of transactions occurs at a speed of sub-seconds to 2 seconds since the CBDCs will run on the fastest blockchain network, Apollo. This feature eliminates any issues to do with downtimes and blockchain bloating that may cripple down transaction processing and CBDC circulation. Through NPP, CBDCs work in synchrony with other payment networks available on the Apollo system.
- Easy Accessibility: NPP provides an arena whereby merchants from around the globe can sign-up on the platform for broader access to the Central Bank Digital Currency. Furthermore, regulated banks and agencies spread across physical locations locally. Another accessibility aspect comes in when users can withdraw CBDCs directly with the use of bank cards introduced by Apollo Fintech through NPP.
- Secure: the whole NPP system runs on the Apollo blockchain network; therefore, financial crimes, including hacking and loss of CBDC funds, are impossible to occur. Besides, quantum resistance technology is under development to solve problems that may come along with quantum computational attacks on CBDCs. The National Currency System eradicated identity theft as the network contains a national ID registration system, thus avoids any form of impersonation.
- Reliability by merchants: After fulfilling every online registration requirements on the NPP network, merchants have the opportunity to advertise their catalogs through the national currency platform. An advantage of registering on the NPP is that the business entities gain a full pool of market attracting consumers who purchase their products using CBDCs. In return, merchants can also access the CBDC payments made after a successful trade.
- Answer to the unbanked: In the modern world, many individuals do not have bank accounts with any financial industry. However, many people own mobile phones that give them a bigger chance of accessing financial services through NPP. Central Bank Digital Users can transact varieties of currencies by either buying or selling them now being onboard the NPP.
CBDCs are currently a hot topic following the global pandemic, with several countries already gearing towards this development. Apollo Fintech targets the provision of resolutions to the successful implementation of the same into central banks. Running on the Apollo blockchain means security and transparent operations is a top assurance through the NPP system.
Governments, central banks, and other commercial banks are not the only ones to reap the NPP’s sweet fruits. Traders and citizens, including the unbanked, will gain altogether. The national currency platform is among the many innovations Apollo Fintech is yet to release for seamless possibilities surrounding blockchain and fintech.