What is a central bank digital currency (CBDC)?

A central bank digital currency (CBDC) is the digital form of a country's fiat currency. A nation's monetary authority, or central bank, issues a CBDC, which promotes financial inclusion and simplifies implementing monetary and fiscal policy. Many countries are exploring how CBDCs may affect their economies, financial networks, and stability.

What are blockchain-inspired CBDCs?

Blockchain technology allows many different entities to hold a copy of a history of transactions so that history is distributed and not controlled by a single entity. Several countries are known to be experimenting with blockchain-inspired CBDCs. Venezuela was a pioneer in this respect, launching its own cryptocurrency, the petro, in 2018.

What is CBDC & how does it work?

In most simple words, CBDC is an electronic form of central bank money that can be used to store value and make digital payments seamlessly. Central banks around the world have started studying CBDC, and according to the report, 80% of the 66 banks surveyed have been involved in research and projects that were related to CBDC.

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.