China was the first nation to introduce government-issued banknotes in the 11th century; however, the fiat money predominance became apparent in the 20th century. The fiat system is the current globally accepted economy driver, with the currencies deriving value from the supply-demand forces. However, the global governments’ promises of providing a self-sufficient, reliable, convenient, and valuable money have proven futile.
Apollo fintech introduces a new CBDC platform that enables central banks to issue sovereign currency, NPP. The National Payment Platform can power an entire economy, from trading to banking processes. The newly issued Apollo CBDC currencies will possess all the fiat currency’s attributes and functions, ultimately replacing them.
All sovereign currencies should be durable, meaning the currencies maintain their health and value. Paper money isn’t eternally durable since it ages in months; thus, the central bank prints new replacement money.
Central banks aim to print highly robust currencies to survive the test of time. The banks use strong materials like cotton paper because of its strength. Creating durable paper money is expensive, but there’s no durability guarantee.
Digital currency attains more durability than fiat currencies because they cannot be destroyed, nor do they age. Other digital currencies increase in value over time, thus are eternally durable.
A reliable national currency must be highly divisible into smaller denominations, to ease the purchase of commodities even in the smallest units. For instance, the United States dollar’s smallest denomination is a penny; however, currently, the least denomination in circulation is $1.
The national payment platform will allow central banks to create digital currencies with the highest divisibility. Central banks using NPP will implant currencies with nearly infinite divisibility; thus, they will easily purchase low-value products.
Uniformity is another critical attribute of a sovereign currency, i.e., all 100 USD bills should look exactly alike. The making materials, colors, and portraits used should be standardized and indistinguishable. Homogeneity guarantees currency users of their transaction certainty and embeds more trust into the sovereign currency.
The Apollo CBDC system will ensure the creation of homogenous, uniform units of the currency. Digital currencies don’t need physical attribute homogeneity; however, the logos used in describing a particular denomination are similar. Moreover, since Apollo blockchain hubs all the coins, they will enjoy similar speed and security attributes. The advantages of fast, transparent transactions will apply in every NPP coin, thus ensuring the complete uniformity of digital currencies.
A currency should have limited supply to maintain its demand and value. The central bank’s money-printing authorities avoid overprinting to keep money supply while the demand perpetually increases. Scarcity is, therefore, the most vital aspect of a sovereign currency.
Recent studies show a direct correlation between money supply and inflation; abundant money supply leads to a surge in inflation. For instance, in November 2008, Zimbabwe increased the printing of paper money leading to a hyperinflation rate of 79.6 billion percent monthly. The government printed money in response to the high national debt, decline in export earnings and economic output, etc.
NPP allows central banks to ensure scarce currency supply. Because of digital money’s durability, there is no need to produce new coins after attaining the initial set maximum. Moreover, digital currencies undergo periodic coin burning aimed at ensuring the value remains intact. Moreover, burning coins leads to an increased demand for money, thus increasing the currency value.
A sound sovereign currency should be easy to transport, and paper money fits the attribute. Carrying notes or coins is easy, even when traveling for long distances. Digital currencies are highly portable since users only need a wallet to move money. NPP will have its wallet, app, and bank cards aiming to ease the process of carrying the currencies. Just taking an internet device ensures the users get access to digital currency.
A sovereign currency is acceptable to individuals and the business community. A currency lacking acceptability can neither be a medium of exchange or store of value. The national payment platform currency will possess acceptability attributes. Implanting merchants, SMS, and online service options in the NPP will drive faster global digital currency adoption.
Digital Currency Replacing The Functions of Money
The NPP’s new sovereign currency will replace fiat currency by taking over all the functions of money. Among the functions are;
- The medium of exchange- The NPP platform’s digital currency will aid in trades with people using the currency to pay for goods and services.
- Store of value- An acceptable currency must also be a good store of value to bolster investments. Storing value requires the asset to have long term deflationary and non-volatile attributes, representing digital currency.
- Unit of account- NPP’s currency will provide a standard allowing the proper comparison and expression of asset value in an easily understandable way.
- Deferred payment standard- The currency will rightfully aid in expressing debt and their future payment values.
In a Nutshell
Apollo’s new CBDC platform NPP, will have characteristics better than paper money. Digital currencies are durable, and the hub Apollo blockchain ensures that transaction details remain entirely immutable. The currency is close to infinitely divisible, thus surpassing the divisibility of the best currencies like the USD, ultimately providing users with the best currency for trade completion.
The uniformity, scarcity, portability, and accessibility features of the digital currency makes it tower above other currencies. Moreover, as a sovereign currency, it provides all the money services, including storing value, exchange medium, deferred payment standard, and unit of account.
Since the CBDC is Apollo blockchain-based, it benefits from the best blockchain features, including security, transparency, scalability, and speed. Apollo’s new CBDC will surpass fiat currencies by possessing the functions and qualities of money.