CBDC

A central bank digital currency is government money in digital form. Unlike a stablecoin issued by a private company, a CBDC is a direct liability of the central bank, like physical cash. Unlike bitcoin, it is centralized and its supply and rules are set by the issuing authority. Most proposals use a permissioned ledger rather than a public blockchain.

More than 100 countries have researched or piloted CBDCs. China's e-CNY is the largest pilot, with hundreds of millions of wallets opened and use in retail payments across many cities. The Bahamas, Nigeria, and Jamaica have launched national CBDCs with limited adoption. The European Central Bank has been preparing a digital euro, with a decision on issuance expected after its preparation phase.

CBDCs are controversial. Supporters cite faster payments and financial inclusion. Critics worry about surveillance of spending and the ability to program or restrict money. In the United States, opposition in Congress and from the executive branch has effectively halted work on a retail digital dollar, with policy favoring privately issued stablecoins instead.