The concept of CBDC has seen a rise in interest on the mainstream finance platforms. Central Bank Digital Currency might seem like a new idea, but several central banks have been actively investigating its feasibility. The idea of a cashless economy is quickly becoming a reality. This impending reality makes Apollo Fintech completing its National Payment Platform such a monumental moment in digital currency history.
Even with interest shown by central banks worldwide, CBDC isn’t the national currency in any country. The country that has reached the highest level of research is China, which is at the pilot stage. Fortunately, the National Payment Platform is here to quicken this adoption and drive up cashless transaction use in the world.
What Is the National Payment Platform?
Apollo’s National Payment Platform is a blockchain-powered innovative cashless system. The platform is designed for central banks to issue a sovereign, digital currency (stablecoin) for national adoption on the Apollo blockchain.
The National Currency System can generate frictionless transactions across an economy. It requires online sign-ups from merchants to ensure efficient peer to peer transactions. Furthermore, the platform facilitates transactions through its app, SMS, QR codes, cards, offline codes, etc. After central bank issuance, the NPP is physically accessible throughout the country by government-approved agents or banks.
The NPP provides regulated banks and commercial entities the blockchain technology to issue CBDC to the nation. They are, therefore, enabling the countries to have a smooth transition to cashless transactions. So how do CBDCs differ from physical cash?
CBDCs Vs. Physical Cash
Central Bank Digital Currencies are digital forms of sovereign currencies issued and backed by the central bank and considered national legal tenders. It is a universal medium of exchange by law. Moreover, CBDC is a reliable store of value and has all the cash characteristics except the physical aspect. The digital currency is used for frequent mid-value transactions, and a means to settle debts or meet any other financial obligations.
As much as CBDC is similar in characteristics to cash, there are significant differences. First, CBDC is not government-issued like cash. It is under the authority of the central bank. This feature is why Apollo’s National Currency Platform is targeting central banks to adopt the technology and not governments directly.
Secondly, CBDCs are universally accepted as legal tenders. Money in a bank account or mobile money is typically not a legal tender. It is usually a promise or liability by the bank or finance institution to give you physical cash upon request.
Preconditions for Digital Currency Adoption
The launch of the National Currency Platform will attract more central banks to adopt a national digital currency. However, before that happens, these countries need to satisfy some conditions for an efficient National Payment Platform implementation.
Widespread use of digital currency will require reliable electricity and secure internet connectivity in most parts of the country. As much as NPP offers offline transaction options like SMS, offline codes, and cards, a well-infrastructured country will ease the adoption of CBDC. Most of these forms of transactions will require citizens to have one kind of electronic or the other, which requires an adequate supply of electricity.
CBDC use requires some level of knowledge and understanding of how the technology works. Pilot programs and digital literacy engagements are necessary to familiarise the population with the technology. The Nation Currency Platform is easy to use and readily accessible, which will ease this initial adoption stage. Countries need to prepare their citizens for what’s to come to avoid confusion and familiarise people with digital currency.
Formal Digital Identity
The country adopting the technology needs to have a digital system that can facilitate the universal adoption of CBDC. The system should efficiently store and integrate technology as a payment scheme.
Central Bank Digital Currencies are under the authority of the central bank. Nevertheless, the public needs to trust that the currency is immune to manipulation and political interference. Therefore, the central bank needs to formulate ways to reassure the people on the National Currency System’s immutability.
Apollo Fintech is a leading blockchain company that develops world-shaping fintech solutions for a global economy. The introduction of the National Payment Platform is making history in the fintech world. Digital Currency adoption has been chugging along slowly as central banks test the waters.
However, a decline in the use of cash and the invention of new technology in fintech is forcing institutions to work faster. The arrival of the National Currency Platform has obliterated any excuse they had to drag their feet. The impending mass adoption will, in turn, positively affect the crypto industry and shine a new light on blockchain technology use. The National Payment Platform is the start of something great.