What is a CBDC?

Central Bank Digital Currency (CBDC) is a revolutionary form of digital money introduced and regulated by a nation's central bank. It represents a significant departure from traditional paper currency and even cryptocurrencies due to its unique characteristics and the authority backing it.

Ralph Fontones

10/10/20231 min read

three round gold-colored coins on 100 US dollar banknotes
three round gold-colored coins on 100 US dollar banknotes

A Central Bank Digital Currency (CBDC) is a digital currency issued by a country’s central bank. It is similar to cryptocurrencies, except that its value is fixed by the central bank and equivalent to the country’s fiat currency 1. Many countries are developing CBDCs, and some have even implemented them 1. CBDCs are intended to function as legal tender and can be used for payments, settlements, and other financial transactions 2.

The launch date of CBDCs varies from country to country. For example, China has already launched its digital yuan, while the United States is still in the research phase 3. The European Central Bank (ECB) has also been researching the possibility of launching a digital euro, but no official launch date has been announced yet .

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