Why Fantom CBDC could be a game-changer

After the success of stablecoins, more and more banks are developing their native central bank digital currency (CBDC) solutions. Fantom CBDC is a solution to upgrade the existing banking infrastructure.

In January 2021, the Bank for International Settlements (BIS) surveyed 65 different central banks representing around 91% of the global economy. And guess what, 56 of those 65 central banks were researching or developing and testing CBDC solutions.

What CBDCs are and what makes Fantom CBDC unique

The digital currency issued by the central bank or CBDC, as the name suggests, is a digital currency controlled and issued by central banks. We already have blockchain-based paper currencies and stablecoins. So why do we need CBDC?

Cryptocurrencies and stablecoins have several advantages over fiat cash, including faster transactions, decentralization, robust security, and much more. Governments around the world want to offer digital currencies with benefits similar to cryptocurrencies while retaining their control to ensure consumer protection and financial stability.

This is where the CBDC comes in. In short, CBDCs are the best of both worlds: they deliver the benefits of blockchain while ensuring consumer protection. Most importantly, users don’t need to switch to the crypto network. CBDCs are integrated into the existing banking infrastructure.

Everything you need to know about Fantom CBDC

Fantom CBDC is extremely fast, bank-secure, has close to zero transaction costs, and most importantly, can handle a high volume of transactions. Additionally, Fantom routes transactions based on customer preferences.

This implies that Fantom can route transactions through a public chain or a private network of secure nodes. As for their CBDC model, Fantom has a hybrid approach that the Bank of England validates. In this hybrid model, Fantom offers both retail and wholesale CBDC solutions.

On the wholesale side, commercial banks open direct accounts with national banks. While on the retail side, commercial banks act as intermediaries between customers, other banks and the Central Bank. Thanks to this, Fantom avoids the disintermediation of commercial banks, providing a win-win solution for all stakeholders – customers, commercial banks and the central bank.

In short, Fantom’s hybrid CBDC model preserves necessary banking infrastructure while enhancing it with blockchain technology. Fantom CBDC sets itself apart because it offers additional advantages in addition to the standard advantages of a CBDC solution.

Benefits of Fantom CBDC for Retail – Home and Small Business

1. Reduced transaction costs: Fantom has close to zero transaction fees. Yes, it only charges a fraction of a penny per transaction. These lower transaction costs and the elimination of intermediaries allow banks to implement microfinance services such as microcredit and microcredit at lower costs that would otherwise be too expensive.
2. Immediate settlement of the transaction: Fantom settles transactions in real time and provides 24/7 service.
3. Contactless payments and financial inclusion: Fantom CBDCs are accessible using mobile wallets, enabling contactless payments. The mobile wallet functionality further enables banks to provide financial services to the unbanked.
4. Integrated tax and VAT policies: Tax and VAT policies can be written in code on the Fantom blockchain. Merchants no longer have to worry about manual administrative work as Fantom automates taxes and VAT deductions.

Benefits of Fantom CBDC for the Wholesale Level – Banks and Large Businesses

1. Interbank payments are settled quickly: With Fantom CBDC, settlements and clearing are consolidated into a single process, allowing banks to settle transactions quickly.
2. Rapid distribution of stimulation packages: Unlike existing methods, Fantom CBDC allows governments to easily and quickly drop by helicopter (pushing a significant amount of new currency units into circulation) or provide stimulus payments.
3. Fight against money laundering and terrorist financing: Each Fantom CBDC unit can be easily located, supporting anti-money laundering (AML) and anti-terrorist financing (CFT) laws.
4. Promotes economic sovereignty and protects confidentiality: The Fantom CBDC system includes digital identification, limiting the use of foreign currencies against national currency, promoting economic sovereignty and protection of privacy.

The bottom line

Fantom CBDC sets itself apart from other CBDC solutions thanks to its hybrid model and the exceptional technological capabilities of the underlying network. It offers benefits to both consumers and banks. From rapid transaction processing to rapid distribution of stimulus packages, Fantom CBDC has it all.

After Fantom successfully presented its CBDC solutions at the Stanford Digital Currency Global Initiative in March 2021, Fantom CBDC is now in the implementation phase. More specifically, the Fantom network has finalized an implementation plan for the deployment of its CBDC solutions to central banks around the world. To keep up with the latest Fantom announcements, follow their blog and Twitter manipulate.