What is CBDC?
CBDC refers to a digital form of national currency issued and regulated by a country's central bank
It combines the benefits of digital technology with the stability and trust associated with traditional fiat currencies
Central banks are exploring CBDCs to enhance financial inclusion, improve payment systems, and address the rise of private digital currencies
CBDCs aim to provide secure, accessible, and efficient digital payment options for individuals and businesses
CBDC operates on a distributed ledger technology (DLT) or blockchain, allowing transactions to be securely recorded and verified
Unlike cryptocurrencies, CBDCs are centralized and typically have a value pegged to the national currency
There are two main types of CBDCs. Retail CBDC is accessible to the general public and can be used for everyday transactions
Wholesale CBDC is restricted to financial institutions for interbank settlements, aiming to improve efficiency in the financial system
CBDCs prioritize security, using encryption and advanced security measures to protect user information and transactions.