Central bank digital currency

In the intermediated model, the central bank issues the CBDC and manages core infrastructures, while financial intermediaries offer customer services.

[4] While CBDCs may share some properties with virtual currency and cryptocurrency, such as programmability,[8] they differ in that a CBDC is issued by a state.

[13][14][15] As of 2023, over 120 different jurisdictions, including major economies like the ECB, UK, and the US, were evaluating national digital currencies.

[21] Although the term "CBDC" did not become widely used until after 2019, central banks have researched and launched digital currency projects for decades.

[13][14][15] By March 2024, the central banks of 134 countries accounting for 98% of the world's GDP were said to be in various stages of evaluating the launch of a national digital currency.

These cryptocurrencies are often considered with the intent of increasing a state's independence from global financial systems, such as by reducing dependence on a foreign currency or by evading international sanctions.

Two weeks later, a Swiss lobby group triggered a national vote on maintaining a "sufficient quantity" of cash in circulation over fears that electronic payments make it easier for the state to monitor its citizens' actions.

[36] In a comment on the British government's plans, the BBC's Faisal Islam said the issue was about access to the data attached to every spending transaction, and whether people might choose to trust a global company more than the state: "The eye here is on maintaining UK monetary sovereignty against upheaval from the likes of Big Tech.

[38] A CBDC is a digital counterpart to fiat money, issued by central banks, unless it is dividend-paying, then it is an ownership stake and a new form of legal tender.