National Digital Currencies

What are national digital currencies?

National digital currencies, also known as central bank digital currencies (CBDC), can be generally understood as digital liabilities issued and backed by a central bank, denominated in an existing sovereign currency, used to exchange or store value, and considered legal tender. They are a digital fiat complement to paper banknotes and coins. Unlike a cryptocurrency, a national digital currency represents a claim on a central bank (like cash) and is backed by the full faith and credit of the issuing government, reducing the risk of holding it.