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What is a CBDC? The digital money governments want to issue

A central bank digital currency is cash, rebuilt as an app, issued and run by the state. It could change what money is.

A CBDC, central bank digital currency, is digital money issued directly by a country's central bank. Not a bank balance, not a crypto token. A digital version of the national currency, with the central bank behind it.

How is that different from what we have?

Cash is issued by the central bank too, but it's physical and anonymous. Nobody keeps a record of who spent which banknote.

Your bank balance isn't central bank money. It's a promise from your bank to pay you. Banks and payment companies keep records, but the central bank doesn't see your purchases.

A CBDC would be central bank money in digital form. Depending on how it's built, the central bank or the intermediaries running it could see a lot more than they do today.

Crypto like Bitcoin and Monero isn't issued by anyone. No central bank can print it, freeze it or change its rules alone.

Why governments want them

The usual reasons given: cash use is falling, private payment companies dominate digital payments, and central banks want a public digital option. Some also mention cheaper cross-border payments, financial inclusion, and competition with private stablecoins.

Why people worry

The worries are about control. A digital currency run by the state could, if designed badly, make every payment visible, allow limits on how much you can hold, let money be programmed to expire or only be spent on approved things, and make freezing someone's money a single click. Read more in CBDC privacy risks.

Who's doing it

Over a hundred countries have looked into CBDCs. A handful have launched one, like the Bahamas and Nigeria. China has run a huge pilot of its digital yuan. The eurozone is preparing a digital euro. The United States went the other way and banned work on a federal CBDC in 2025. See CBDCs around the world.

FAQ

Is a CBDC the same as crypto?

No. A CBDC is issued and controlled by a central bank. Crypto like Bitcoin and Monero has no issuer.

Will CBDCs replace cash?

Central banks say no, and promise to keep cash. Critics point out that's a promise, not a guarantee.

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