The Bank of Canada has become the first member of the G7 to use quantum computing to model situations in which cryptocurrency and fiat currencies coexist.
This week, the Canadian startup that is leading research achieved a significant milestone: its model can examine more than 1 octillion conceivable situations in less than 30 minutes. A ten followed by thirty zeros equals an octillion.
That means Metaverse Computing has finished its proof-of-concept, which combines blockchain data from Tether (USDT), a stablecoin whose tokens are tethered to the US dollar, and public data from up to ten major financial institutions. To come up with realistic parameters, they also consulted specialists from two large Canadian banks.
Tether was chosen as the model by Multiverse because the stablecoin, which was launched in 2014, had seen a wide range of market conditions throughout the course of its eight years on the blockchain.
Because converting cash to a digital asset requires some upfront knowledge and cost, most scenarios in the model suggested that non-financial institution adoption of the cryptocurrency would be gradual. It was also able to model how banks would react by lowering wire transfer costs in order to compete with the extremely cheap cost of crypto transactions.
Because the research is still in the proof-of-concept stage, there are no consequences for Canada’s crypto legislation at this time. However, being able to employ quantum computing models to simulate how fiat and digital currencies can compete for use and adoption is a major step forward.
The central bank’s director of data science, Maryann Haghighi, said, “
We wanted to test the power of quantum computing on a research topic that is difficult to tackle using classical computing techniques. By running sophisticated simulations on quantum hardware, we were able to learn more about how quantum computing might bring new insights into economic challenges.
In 2019, the Bank of Canada approached Metaverse Computing about its work in anticipating financial crises. The Singularity software development kit, the company’s flagship product, augments standard financial quant tools like Python or Microsoft Excel with quantum-level cloud computing capacity.
According to Metaverse Chief Technology Officer Sam Mugel, Ph.D:
The central bank’s choice to have the team mimic Bitcoin adoption, according to Metaverse was a bit of a macroeconomic flex.
Also Read: It is possible for the Bank of Spain to Block Crypto Purchases in certain Circumstances
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