Central Bank Digital Currency (CBDC)
A central bank digital currency (CBDC) is a digital form of a country’s money issued directly by its central bank. The International Monetary Fund defines it as “a new form of money, issued digitally by the central bank and intended to serve as legal tender.” Because a CBDC is a claim on the central bank itself, it differs from a commercial bank deposit, a privately issued stablecoin and a cryptocurrency such as Bitcoin.
What Does CBDC Mean?
Most money people already use digitally, such as a bank balance or a payment app balance, is owed by a private company. The Federal Reserve puts the difference simply: today’s digital money is a liability of “private entities, such as commercial banks”, while a CBDC “would be a liability of a central bank.” That is why the European Central Bank calls the planned digital euro “a digital form of cash” and the Bank of England says a digital pound “would be like a digital form of cash.”
China’s e-CNY has partly moved away from this model. Since January 1, 2026, e-CNY balances held in commercial bank wallets count as bank deposits that can earn interest and are covered by deposit insurance.
CBDC vs Stablecoins and Cryptocurrencies
| Feature | CBDC | Stablecoin | Cryptocurrency (e.g. Bitcoin) |
|---|---|---|---|
| Issuer | Central bank | Private company | No issuer |
| Value | Fixed in the national currency | Pegged, usually to the US dollar | Floats freely |
| Supply set by | Central bank | Issuer, backed by reserves | Protocol rules |
| Legal tender | Intended to be | No | Generally no |
Some CBDC platforms use blockchain or other distributed ledger technology, but that does not make them cryptocurrencies, because one institution controls the money and its value is fixed. Our glossary entry on stablecoins explains how private dollar tokens work.
Retail and Wholesale CBDCs
A retail CBDC is meant for households and businesses, as a digital version of cash for everyday payments. A wholesale CBDC is used by banks and other financial institutions to settle large payments with tokenised central bank reserves. Projects such as Project Agorá and mBridge are wholesale. CBDCs can also be account-based, where ownership is tied to a verified identity, or token-based, where whoever controls a digital token can spend it. The design choice shapes how much privacy users get.
CBDCs in 2026: Key Facts
- 146 countries and currency unions are exploring a CBDC, but only three retail CBDCs are fully launched: the Bahamas’ Sand Dollar, Nigeria’s eNaira and Jamaica’s JAM-DEX, according to the Atlantic Council’s May 2026 tracker. The Eastern Caribbean’s DCash pilot, once counted among launched CBDCs, closed in January 2024.
- China’s e-CNY is the largest CBDC pilot in the world, with about 4.3 billion cumulative transactions worth about 31 trillion yuan by the end of September 2026, according to People’s Bank of China figures published by Xinhua.
- The digital euro depends on an EU law still in negotiation. The ECB plans a 12-month pilot with 36 payment providers from the second half of 2027 and aims to be ready for a possible first issuance in 2029, if the law is adopted in 2026. Our digital euro timeline has the latest steps.
- In the United States, a January 2025 executive order bars federal agencies from establishing, issuing or promoting a CBDC, and since July 11, 2026, federal law has barred the Federal Reserve from issuing one until December 31, 2030. Our June 2026 report on the ban clearing Congress has the background.
- Russia began a mass rollout of the digital ruble on September 1, 2026, while the UK has not decided whether to issue a digital pound.
Benefits and Concerns
Supporters, including the ECB, argue that a CBDC would give people a cash-like way to pay digitally, could keep payments working during outages through offline use and would reduce Europe’s reliance on non-European card schemes and US dollar stablecoins. Concerns include privacy, whether spending could be programmed or restricted, and the risk, flagged by the Federal Reserve in 2022, that a CBDC could pull deposits out of commercial banks. Planned designs try to address these points: the digital euro would pay no interest and would have a holding limit, and the ECB and the Bank of England have both ruled out programming how people spend.
Frequently Asked Questions
What does CBDC stand for?
CBDC stands for central bank digital currency. It is a digital form of a country’s official money, issued by the central bank, just as banknotes are. Unlike the balance in a bank account, which is a promise from a commercial bank, a CBDC would be a direct claim on the central bank. Dozens of countries are piloting CBDCs, but only three have fully launched a retail one.
Is a CBDC the same as a stablecoin?
No. A stablecoin is a private token issued by a company and backed by reserves, usually pegged to the US dollar. A CBDC is issued by a central bank and is part of the national currency itself. In the United States, private stablecoins will be regulated under the GENIUS Act from January 18, 2027, while federal law bars the Federal Reserve from issuing a CBDC until the end of 2030.
Is Bitcoin a CBDC?
No. Bitcoin has no issuer, its supply is set by its protocol and capped near 21 million coins, and its price moves freely. A CBDC is the opposite on each point: a central bank issues and controls it, sets its supply and fixes its value to the national currency. Some CBDC platforms use blockchain technology, but that does not make them cryptocurrencies like Bitcoin.