CBDC

A CBDC, or central bank digital currency, is a digital form of a country’s official money issued and backed directly by its central bank. Unlike privately issued stablecoins or decentralised cryptocurrencies, a CBDC is a direct liability of the central bank, similar to physical cash but in electronic form. Governments explore CBDCs for goals such as payment efficiency, financial inclusion, and monetary policy, and designs differ, including retail versions for the public and wholesale versions for institutions.

A common misconception is that CBDCs are cryptocurrencies; they are centrally controlled and not decentralised. Many remain in research or pilot stages.