GLOSSARY · BLOCKCHAIN & WEB3
CBDC (Central Bank Digital Currency)
What a CBDC is, how it differs from a stablecoin and from a bank deposit, and where the ECB digital euro stands.
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What is a CBDC?
A CBDC (Central Bank Digital Currency) is a central-bank liability in digital form, accessible to households and firms (retail CBDC) or only to financial institutions (wholesale CBDC). Unlike a stablecoin — issued by a private entity against reserves — and unlike bank money — a commercial bank liability — a CBDC is central bank money: the same issuer as banknotes, with no private-issuer risk.
In the euro area, the ECBs digital euro does not exist yet: the regulation that would create it, COM(2023) 369, was still being negotiated by the European Parliament and the Council as of October 13, 2026, and the decision to issue it lies with the ECB once the law is adopted (see our digital euro entry). Other central banks are further along in pilots (Chinas e-CNY is the largest) and several are exploring the wholesale route to settle interbank operations and tokenized securities in central bank money.
For tokenized asset markets, wholesale CBDC is the piece that would enable definitive delivery-versus-payment settlement in central bank money; until it arrives, that role is covered by MiCA-regulated e-money tokens (EMTs), as we explain in our guide to the euro stablecoin.
Explained simply
A CBDC is like cash, but digital and issued by a countrys central bank. If the digital euro ever launches, holding digital euros will be like having banknotes on your phone: money from the European Central Bank, not from a private bank or a company. It differs from cryptocurrencies in that it is not decentralized: the central bank controls it.
CBDC: key points
- Digital money issued by the central bank: the same issuer as banknotes
- Can be retail (for the public) or wholesale (financial institutions only)
- Not a cryptocurrency or a stablecoin: no private issuer, no decentralization
- The digital euro does not exist yet: its regulation is still being negotiated (October 2026)
CBDC: advantages
- No private-issuer risk: a direct central-bank liability
- Settlement finality in central bank money, ideal for tokenized markets
- Public digital payments without depending on private networks
CBDC: disadvantages
- Privacy: the design decides how much the issuer sees of each payment
- Bank disintermediation risk if it replaces deposits, hence holding limits
- Uncertain timeline: most projects remain in study or pilot phase