Overview
A central bank digital currency (CBDC; also called digital fiat currency or digital base money) is a digital currency issued by a central bank, rather than by a commercial bank. It is also a liability of the central bank and denominated in the sovereign currency, as is the case with physical banknotes and coins.
Rather than a new currency, CBDC is a form of central bank electronic money that comprises both retail CBDCs and wholesale CBDCs. Retail CBDCs are essentially digital counterparts of physical banknotes used for households and businesses to make payments for everyday transactions, while wholesale CBDCs are designed for financial intermediaries and operate similarly to central bank reserves, but incorporating additional features facilitated by tokenization.
The present concept of CBDCs differs from virtual currency and cryptocurrency in that a CBDC is or would be issued by a state. Most CBDC implementations will likely not use or need any sort of distributed ledger such as a blockchain.
In 2023, 114 countries, including major economies like the ECB, UK, and the US, were evaluating national digital currencies, with 11 countries, territories or currency unions having launched CBDCs, and 21 having implemented CBDCs in their pilot programs.
From Wikipedia (CC BY-SA 4.0).
