A digital form of a country's official currency, known as a CBDC, issued and backed directly by its central bank.
A central bank digital currency is a direct liability of the central bank, like physical cash, rather than money held in a commercial bank account. Designs vary: retail CBDCs are for the public to use in everyday payments, while wholesale CBDCs are for settlement between financial institutions. Some use blockchain-style technology, while others use conventional databases.
The Bahamas launched the Sand Dollar in 2020, Nigeria introduced the eNaira in 2021, and China and India have run large pilots of the e-CNY and digital rupee. Many other central banks are researching or testing designs. For example, a retail CBDC could let a person pay a shopkeeper directly from a central bank-backed digital wallet. Debates focus on privacy, effects on commercial banks, cybersecurity, and whether CBDCs offer enough benefit over existing instant payment systems.
A digital currency secured by cryptography and typically recorded on a decentralized blockchain rather than issued by a central bank.
StablecoinA cryptocurrency designed to maintain a stable value, usually by being pegged to a fiat currency such as the US dollar.
What a central bank digital currency is, how it differs from stablecoins and the money already in your bank account, and where the US debate over a digital dollar stands in 2026.
How stablecoins hold their value, the difference between reserve-backed and algorithmic designs, what went wrong with TerraUSD and USDC in past crises, and what the GENIUS Act changes.