What is central bank digital currency (CBDC)?

Central Bank Digital Currency (CBDC) is the digital form of a country's fiat currency, which is regulated by its central bank.

What is a CBDC (CBDC)?

In its simplest terms, unlike cryptocurrencies, a CBDC is a government-backed currency. However, countries like El Salvador are making waves by adopting Bitcoin as legal tender. Unlike Bitcoin, which is a decentralized cryptocurrency, a central bank digital currency (CBDC) is centralized and regulated.

What if CBDCs were backed by a central bank?

This volatility could cause severe financial stress in many households and affect the overall stability of an economy. CBDCs, backed by a government and controlled by a central bank, would give households, consumers, and businesses a secure means of exchanging digital currency.

Are CBDCs cryptocurrencies?

Though the idea for central bank digital currencies stems from cryptocurrencies and blockchain technology, CBDCs aren't cryptocurrencies. A central bank controls a CBDC, whereas cryptocurrencies are almost always decentralized, meaning they can't be regulated by a single authority, such as a bank. Does the U.S. Have a CBDC? There is no U.S. CBDC.