A central bank digital currency (CBDC) is a type of digital currency that is issued and controlled by a country’s central bank. CBDCs are similar to traditional fiat currencies, but they exist only in digital form and can be used for electronic transactions. Unlike cryptocurrencies, which are decentralized and not backed by any government, CBDCs are backed by a central authority and can be used as legal tender for making payments and settling debts.
The main advantage of a CBDC is that it can be easily accessed and used by individuals and businesses through digital channels, which can help to improve financial inclusion and the efficiency of the financial system.
See also: Decentralized Finance (DeFi), Non-Fungible Token (NFT), Decentralized Exchange (DEX).