The Bank of Canada has employed startup Multiverse Computing, to use quantum computing to simulate future scenarios where fiat currency and crypto could coexist.
The model developed by Multiverse Computing can perform the herculean task of calculating 1 octillion scenarios in 30 minutes.
Multiverse Computing has yet only completed its proof-of-concept. The startup combined data from stablecoin Tether (USDT) and public data from 10 major financial institutions. Tether was chosen because of multiple market scenarios experienced by it since its inception.
Experts from two major Canadian banks were also consulted. The results of the simulations showed slow adoption of cryptocurrency by non-financial institutions. The simulations also concluded that banks might reduce wire fees to compete with low transaction fees of crypto.
“The collaboration helped us learn more about how quantum computing can provide new insights into economic problems by carrying out complex simulations on quantum hardware” said Maryann Haghighi, the Central Bank’s director of Data Science.
The Bank of Canada and Multiverse Computing’s affiliation started in 2019. The startup then worked on predicting financial crashes.
The Canadian government felt its economy was too stable for a financial crash and thus asked the startup to look into the emerging crypto market. The research evolved to include the regulations imposed on crypto.
Initial technology only allowed a few banks to be allowed in the simulation, however their technology now can take into account upto 10 financial institutions.
Multiverse Chief Technology Officer Sam Mugel, Ph.D. said, “Another space we touched upon in our study was looking at financial institutions exchanging currency, but what if we started adding in things like trading houses for crypto. Like maybe we could look at a three-way model of crypto adoption, the trading house and then the actual people adopting it.”
Canada has taken a very conscientious approach towards crypto adoption. The Bank of Canada also collaborated with the MIT university to research how advanced technologies shape the potential design of a CBDC.
