Central Bank Digital Money is a digital form of a country’s fiat currency issued and backed by its central bank. This differs from cryptocurrencies as it represents a direct liability of the central bank, similar to physical cash. CBDC aims to offer a secure, efficient, and universally accessible digital payment method.
Context
Central banks globally are actively researching and piloting CBDCs, assessing their potential impact on monetary policy, financial stability, and payment systems. Debates center on privacy concerns, the role of commercial banks, and the implications for cross-border transactions. Upcoming trials and policy announcements will shape the future trajectory of digital currencies within national economies.
The RTGS synchronization layer provides a systemic on-ramp for DLT-based FMI, fundamentally reducing counterparty risk and optimizing capital velocity across the UK financial system.
The BoE is architecting RTGS interoperability with DLT platforms to enable atomic settlement and unlock significant capital efficiencies across the financial ecosystem.
This DLT initiative tokenizes the €310B commercial paper market, establishing a central bank digital currency (CBDC) rail for instantaneous, risk-mitigated settlement.
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