CBDC — Central Bank Digital Currencies
CBDC (Central Bank Digital Currency) is a digital form of national currency issued and controlled by a country’s central bank. By their economic nature, CBDCs are official state money, fully equivalent to cash and non-cash fiat funds.
Unlike cryptocurrencies and stablecoins, CBDCs represent a direct liability of the central bank, rather than a private company or a decentralized network. In essence, CBDCs are digital fiat money, embedded into modern digital infrastructure.
CBDCs are not cryptocurrencies, do not imply decentralization, and are not designed to provide anonymity. Their primary objective is the modernization of national payment systems and the enhancement of monetary circulation efficiency.
Why Governments Are Developing CBDCs
The development of CBDCs is driven by several fundamental factors:
- digitalization of the economy and payment systems,
- declining use of cash,
- rising popularity of private digital currencies and stablecoins,
- need for greater transparency of financial flows,
- reduction of transaction costs,
- strengthening control over monetary circulation,
- ensuring technological sovereignty.
CBDCs allow central banks to maintain their central role in the monetary system amid digital transformation and increasing competition from private payment platforms and crypto infrastructure.
Differences Between CBDCs and Stablecoins
Despite their superficial similarity, CBDCs and stablecoins differ fundamentally in nature.
| Criterion | CBDC | Stablecoins |
|---|---|---|
| Issuer | Central bank | Private company |
| Legal status | Legal tender | Private digital asset |
| Economic nature | Sovereign money | Corporate liabilities |
| Backing | State guarantees | Issuer reserves |
| Regulation | Direct government regulation | Financial and corporate regulation |
| Control | Full central bank control | Company control |
The key difference lies in the fact that CBDCs are official state currencies in digital form, whereas stablecoins are private imitations of fiat money, operating within commercial platforms.
Technical Architecture of CBDCs
CBDCs can be implemented using various technological platforms. Unlike cryptocurrencies, the use of blockchain is not mandatory.
In practice, two-tier models are most commonly employed, where:
- the central bank issues CBDCs,
- commercial banks and payment providers provide user access,
- transaction records are maintained in centralized or permissioned distributed systems.
Programmability of CBDCs
One of the key features of CBDCs is the ability to program monetary operations.
This enables:
- targeted social payments,
- subsidies with restricted usage,
- automatic taxation,
- time-limited funds,
- automated execution of financial conditions.
As a result, CBDCs transform money into an active instrument of economic policy, allowing more precise management of financial flows and public programs.
Digital Yuan (e-CNY)
The digital yuan (e-CNY) is the world’s most advanced and large-scale CBDC project, developed by the People’s Bank of China.
Key features:
- large-scale pilots across dozens of cities,
- integration with major payment ecosystems WeChat Pay and Alipay,
- offline payment functionality,
- use in public payments and retail transactions.
The e-CNY project is regarded by China as a strategic element of national financial infrastructure, aimed at improving payment efficiency, reducing dependence on private platforms, and strengthening control over monetary circulation.
Digital Ruble
The digital ruble is the Central Bank of Russia’s project for creating a national digital currency.
Its architecture is based on a two-tier model:
- the Central Bank of Russia conducts issuance and maintains the core ledger,
- commercial banks provide user access through digital wallets.
Key features:
- direct liability of the central bank,
- smart contracts for programmable payments,
- integration with public finance systems,
- potential offline operations.
The digital ruble is viewed as an instrument for modernizing payment infrastructure and strengthening financial sovereignty.
The Global CBDC Trend
As of 2026, over 100 countries are researching, piloting, or implementing their own CBDCs, including:
- China — e-CNY,
- European Union — digital euro,
- India — e-Rupee,
- Brazil — Drex,
- Nigeria — eNaira.
This represents a global trend toward the digitalization of national currencies, with the potential to reshape international payments and the global financial system.
Advantages and Limitations of CBDCs
Potential advantages include:
- faster payments,
- lower transaction fees,
- increased financial inclusion,
- greater transparency,
- automation of government payments.
Potential limitations include:
- reduced anonymity,
- technological risks,
- cybersecurity threats,
- high degree of centralization.
CBDCs strengthen the role of the state in the monetary system and require a balance between efficiency, security, and protection of user rights.
Summary
CBDCs represent the next stage in the evolution of fiat money, integrating sovereign monetary systems with digital technologies.
They form a new architecture of payment systems, expand the toolkit of economic policy, and gradually transform global financial infrastructure. In the long term, CBDCs are capable of significantly reshaping monetary circulation, the role of banks, and the structure of the global economy.