What is a central bank digital currency?

The central banks issuing and managing these digital currencies are national financial authorities that oversee a country’s currency, supply of money and monetary policy – like setting interest rates, which change the cost of borrowing. What is the Forum doing to improve the global banking system? How safe are central bank digital currencies?

What is digital fiat currency (CBDC)?

This digital fiat currency is issued by central banks in token form or with an electronic record associated with the currency and pegged to the domestic currency of the issuing country or region. Since this digital currency is issued by central banks, the central banks maintain full authority and regulation over the CBDC.

Where can digital currency be held?

They can hold the digital currency either in an account with the central bank, or as electronic tokens, the World Economic Forum explains in its Central Bank Digital Currency Policy‐Maker Toolkit. The electronic tokens could be held on mobile devices, prepaid cards or other forms of digital wallets.

What is CBDC currency?

CBDC is currency – or money – issued and governed by a country’s central bank, such as the Bank of England. But instead of being physical money (notes and coins) it is in digital (or electronic) form. All transactions using this digital currency are also recorded in digital form – such as on an encrypted database. What is CBDC worth?