Bank of Canada to Simulate Crypto Adoption Cases using Quantum Computing

April 20, 2022 Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Metaverse, NFTs, Enterprise, FinTech and Alternative Finance, Fintech Services, Innovation and Resources, Legal Issues, Regulation, Consultation No comments

Decrypt | Stacy Elliott | Apr 14, 2022

The researchers’ model can complete in half an hour what would take a regular PC longer than a human lifetime.

The Bank of Canada has become the first G7 country to turn to quantum computing to simulate scenarios where cryptocurrency and fiat currency can coexist.

This week, Multiverse Computing, the startup leading Canada’s research, hit a milestone: Its model can evaluate more than 1 octillion possible scenarios in 30 minutes. An octillion is a 10 followed by 30 zeros.

See: Quantum computing use cases are getting real—what you need to know

That means Multiverse Computing has completed its proof-of-concept, which combines blockchain data from stablecoin Tether (USDT), whose tokens are pegged to the U.S. dollar, and public data from up to 10 major financial institutions. It also consulted with experts from two major Canadian banks to come up with realistic parameters.

Multiverse Computing chose Tether for its model because the stablecoin, founded in 2014, had endured a variety of market scenarios in its eight years worth of blockchain data.

Most scenarios in the model showed that non-financial institution adoption of the cryptocurrency would be slow, since there was some upfront knowledge and cost associated with converting fiat to a digital asset. It was also able to simulate how banks might respond by reducing wire transfer fees to compete with the very low cost of crypto transactions.

See: Quantum computers could crack the cryptography that underpins financial stability

The research itself has only just reached the proof-of-concept stage, so there aren’t yet any implications for Canada’s crypto regulations. But being able to use quantum computing models to simulate how fiat and digital currencies might compete for use and adoption is a big leap forward, says a Bank of Canada official.

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