Central Bank Digital Ledger

Definition ∞ A Central Bank Digital Ledger refers to a distributed ledger technology system maintained by a central bank for the issuance and management of a central bank digital currency (CBDC). This ledger provides a record of all transactions involving the CBDC, ensuring transparency and traceability under central authority. It represents a digital form of fiat currency, differing from decentralized cryptocurrencies in its centralized control and regulatory backing. The system aims to modernize payment infrastructure and enhance financial stability.
Context ∞ The state of Central Bank Digital Ledgers is a subject of extensive global research and pilot programs, with many nations exploring their potential benefits and risks. A key debate involves balancing privacy concerns for users with the central bank’s need for oversight and control. Future developments will focus on interoperability standards between different CBDC systems and their potential impact on existing commercial banking structures.