CBDCs

A crypto CBDC, also known as a Central Bank Digital Currency, is a digital version of a country’s national currency that is issued and regulated by the central bank. It uses blockchain technology to facilitate secure transactions, ensure transparency and provide various common cryptocurrency functions. These features include peer-to-peer transactions, programmable functionalities and regulation by a central bank.

The theoretical goal of crypto CBDCs is to merge the advantages of cryptocurrencies with the stability and supervision offered by central banks. But CBDCs raise serious privacy concerns, as they may allow central banks to access detailed transaction data, which runs against blockchain’s philosophy of financial decentralization (DeFi) and anonymity.