What Is A Central Bank Digital Currency? (CBDC)

Target Audience? Finance / Economics

Key Words? What is a Central Bank Digital Currency? (CBDC)

Central bank digital currencies (CBDCs) are a form of digital currency issued by a country's central bank. Countries like the USA are developing CBDCs and looking to provide legislation so as to help regulate these digital currencies.

Although CBDC's are similar to cryptocurrencies which have gained popularity in the recent years, the difference is that CBDC's would be set by the Country's Central Bank and their value is fixed to the equivalent of the country's fiat currency. Cryptocurrencies as they are decentralized are not as reliable as they are highly volatile.

The benefits of CBDC's would be to provide businesses and consumers with privacy, convenience, accessibility and financial security. Many US households up through 2020 did not even have bank accounts or access to financial services. Benefits would also include lower risk of money laundering and financial