What is a CBDC?

A CBDC, short for central bank digital currency, is a digital version of a country's official money, issued by its central bank. It would be a direct claim on the central bank, as a banknote is. That sets it apart from the money in a bank account, which is a claim on a commercial bank.

How is a CBDC different from crypto or a stablecoin?

All three are digital, but who stands behind them differs.

• Cryptocurrencies such as bitcoin have no issuer. Their rules are enforced by a network. See who controls cryptocurrency.
• Stablecoins are issued by private companies that promise to redeem each token for a dollar or other currency. See what a stablecoin is.
• A CBDC is issued and controlled by the state. The central bank sets the rules.

A CBDC does not need a blockchain, and many designs run on a conventional central database. A retail CBDC is for the public. A wholesale one is used only between banks.

Which countries have a CBDC?

Three countries have fully launched one, according to the Atlantic Council's tracker as updated in May 2026: the Bahamas, whose Sand Dollar arrived in 2020, Nigeria and Jamaica. Take-up in all three has been slow.

China's digital yuan, the e-CNY, is the largest project by far. In the euro area, the European Central Bank finished a two-year preparation phase in October 2025. It says a digital euro could be issued during 2029 if EU lawmakers adopt the necessary law in 2026. A European Parliament committee backed the proposal in June 2026, with negotiations among EU institutions still to come.

What is the US position?

The United States has moved against a CBDC. The Federal Reserve studied the idea in a 2022 discussion paper without taking a position. In January 2025, an executive order from President Donald Trump barred federal agencies from establishing, issuing or promoting one.

Congress then acted. The House passed a stand-alone ban in July 2025. In July 2026, a housing bill carrying a similar ban, the 21st Century ROAD to Housing Act, became law without the president's signature. It bars the Federal Reserve from issuing a CBDC, directly or through intermediaries, until December 31, 2030. US policy instead favors privately issued dollar stablecoins regulated under the GENIUS Act.

Why are CBDCs controversial?

Supporters say a CBDC could make payments cheaper and faster, reach people without bank accounts and keep public money relevant as cash use declines.

Opponents focus on privacy and power. Unlike cash, a digital currency leaves a record, and critics fear a government could monitor spending or restrict how money is used. Banks worry that customers would shift deposits to the central bank, shrinking the funds available for lending. Central banks working on them, including the ECB, say their designs include privacy safeguards and caps on holdings to address both concerns.