Wholesale Central Bank Digital Currency

Definition ∞ Wholesale Central Bank Digital Currency is a digital form of central bank money intended for use by financial institutions, not the general public. This type of digital currency is designed to facilitate interbank payments and wholesale financial transactions, offering advantages such as instant settlement, reduced counterparty risk, and enhanced operational efficiency. It typically operates on a distributed ledger technology platform, providing a secure and programmable medium for large-value transfers. Its purpose is to modernize financial market infrastructure.
Context ∞ Wholesale Central Bank Digital Currency is currently a significant area of exploration for central banks globally, aiming to improve the efficiency and resilience of financial systems. A key discussion revolves around its potential impact on monetary policy, financial stability, and the role of commercial banks. A critical future development involves pilot programs and international collaborations to test its practical implementation and cross-border capabilities.