Overview
A central bank digital currency (CBDC) is a digital currency issued by a central bank as legal tender. It is the official digital form of a national currency. CBDCs are being explored globally.
How It Works
A central bank issues CBDC balances to citizens and institutions, often through regulated intermediaries. It can be account-based or token-based. Design choices affect privacy and programmability.
Why It Matters
CBDCs modernize payment systems and extend central bank money to digital form. They raise privacy and financial-stability questions. They coexist and compete with stablecoins and crypto.
Related Concepts
CBDCs relate to Stablecoins, Regulation, and Payment systems. They are the Central Bank's digital money.