Central Bank Digital Currency Explained: What Is Central Bank Digital Currency?

Central banks are exploring the possibility of issuing digital currencies. The general idea is that they would be more efficient than physical cash, and could help reduce the cost of managing the national monetary supply.

But there's a lot of debate over what a Central Bank Digital Currency (CBDC) would look like. Some people think it should be a cryptocurrency like bitcoin, while others argue it should behave more like traditional fiat money.



What Is a Central Bank Digital Currency?

A central bank digital currency (CBDC) is a digital form of money issued by a central bank. A CBDC would be designed to replace cash as the primary means of payment in everyday commerce, just as physical notes and coins currently do.


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