CBDC

Definition ∞ CBDC refers to a central bank digital currency, a digital form of a nation’s fiat money. It represents a direct liability of the central bank, offering a secure and stable digital payment instrument. Unlike decentralized cryptocurrencies, CBDCs are centrally controlled and regulated by governmental monetary authorities. Their design varies, ranging from retail versions for public use to wholesale versions for interbank settlements.
Context ∞ The development of CBDCs remains a significant policy discussion among global central banks, driven by goals such as enhancing payment efficiency, promoting financial inclusion, and maintaining monetary stability in a digital era. Key debates concern privacy implications, potential disintermediation of commercial banks, and geopolitical influences on cross-border transactions. Many nations are conducting pilot programs to assess feasibility and impact.