Algorand-Redefining The Central Bank Digital Currency - CoiNews


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Tuesday, July 21, 2020

Algorand-Redefining The Central Bank Digital Currency

Since the digital system is taking over different sectors, enhancing activities on a lot of systems, at least those who have adopted it. A look at things in today's world will reveal that the fiat currency as a medium of payment can no longer keep up with the digital revolution. The fiat currency is limited in a lot of ways, as it has countlessly shown a number of flaws in its design and capability to function as the global medium of payment. This failure in the global financial system leaves a great loop in the system and calls for a solution which will help the world transition into the digital system, and as well meet up with the activities in the rapidly growing digital world. Well, luckily, such a currency has finally emerged. Today, our gaze will be on the Central Bank Digital Currency (CBDC) and then proceed to how Algorand is redefining the CBDC. Most of you probably haven't heard of it before now, so let's give a lucid explanation.

Central Bank Digital Currency And What It Is All About
Central Bank Digital Currency is a tool considered as the digital type of a fiat currency. It is often issued by the government of a nation, as a form of replacement for the inefficient fiat currency. It meets all the requirements of the regular fiat as a means of payment by being a store of value and a unit of account. The CBDC allows its users to carry out transactions seamlessly, without the need to have physical cash, as every transaction is done digitally. With the help of the central bank of a country, this digital fiat (CBDC), gets injected into a system, and then impacts positively on its economy, bringing about the rapid growth of that economy, efficiency in financial transactions as well as digital revolution. Now that you know about the Central Bank Digital Currency (CBDC), it's time to consider its benefits to a system or country.
Benefits of CBCD
Once this digital payment medium is adopted on a system, payments will be made seamless for global users, as it will rely more on efficient and sophisticated technologies, upon which the CBDC is built, to execute transactions. By going digital upon the adoption of the CBDC, cross border payments will become possible, seeing as it is restricted with fiat currency. The rate of crime such as fraud and other dishonest operations, which are experienced today, with the fiat currency, will be greatly reduced in any country making use of the CBDC, as it is easy tracking every transaction made with this digital fiat. Additionally, the adoption of the Central Bank Digital Currency (CBDC) will not just make an economy grow, but will also make it superior, compared to other economies, which is one of the dreams of every country, to have a reputable and an unwavering financial system. Furthermore, this digital payment tool helps the members of a country, to efficiently utilize the rapidly growing technologies for the improvement of their different systems. There are unlimited benefits, when it comes to the Central Bank Digital Currency, in a nation. But, for a tool this is powerful, a revolutionary technology is also required for its efficient implementation, and to do that ...

The Algorand Blockchain Has Been Adopted
Algorand is a Blockchain invented by the Algorand foundation, as a means of making payments easier for the global financial system, through the use of improved technologies and algorithms. It is inclusive and open source, so as to give everybody the liberty to adopt the Blockchain and enjoy all its benefits.
Algorand is a permissionless distributed ledger, which is created to be fast, reliable, scalable, with a guarantee of security for every transaction executed on it. This permissionless Blockchain is open-source and allows any system to fully adopt it, and integrate it into their system, subsequently enhancing a better performance. So, Algorand is now being used in a lot of systems, and due to its improved structure and useability, the Algorand Blockchain has been used to create the first Central Bank Digital Currency.

Role of Algorand in the Creation of CBDC
The Algorand Blockchain is adopted in the creation of the CBDC by the Marshal Island, because of the level of development which it exhibits. Before now, incorporating an innovative financial tool as sophisticated as the CBDC into a nation's financial system, is very difficult, since every system is trying to get a hang on the digitalization going on in the world. But, the Algorand Blockchain makes it very easy for different nations to readily integrate with their system following its scalable design. The Blockchain algorithm will help countries maintain security of assets and ensure the degree of transactions carried out with the CBDC, because it is able to track transactions executed on it, and the details are available for viewing on the Blockchain. To fulfill the speedy transaction promised with the CBDC, the Algorand Blockchain with its fast system and high transaction throughput, is able to facilitate multiple CBDC transactions at a very fast pace, this way it will meet the demand of the global system.

The Central Bank Digital Currency will undoubtedly make the global system better, giving the users the benefits of digital assets. By creating the CBDC on the Algorand Blockchain, all the gains of transacting with a digital currency will be realized. The algorithm is redefining the CBDC by making it a superior transaction means, which is not affected by the flaws limiting the regular fiat. If you wish to know more about Algorand, please visit the website here

Anderson, Algorand Ambassador

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