CBDC in Simple Terms: Central Bank Digital Money and Its Impact on the Economy

Introduction: Fundamental Concepts of Digital Money and CBDC

CBDC (Central Bank Digital Currency) is not just another stablecoin or e-money from a private startup. It is a digital version of a national currency, fully issued and controlled by the central bank.

CBDC combines payment convenience with state control, making it a powerful tool for economic policy and regulation.

📌 Key difference from stablecoins: a stablecoin is a product of a private company backed by reserves that can fail, while a CBDC is a government currency whose collapse is only possible if the state itself fails.

CBDCs come in two types:

• Retail CBDC — accessible to ordinary citizens through mobile apps and wallets: paying for goods and services, transferring money without bank intermediaries.
• Wholesale CBDC — for banks and large corporations: settlements, clearing, interbank transfers on a blockchain-like infrastructure. Retail users won’t see this directly, but billions move through this system.

Myths and Concerns Around CBDC

1. “It’s on the blockchain — so it’s private”

   In reality, the state sees who paid whom and when. CBDC can not only execute transactions but also block them — if necessary, a person can be completely excluded from the financial system.

2. “It’s just a digital version of money”

   Not only that. For example, in China, pilot programs used burnable e-CNY: money had to be spent within a set time frame. CBDC thus becomes a tool for economic stimulation and consumption control.

CBDC in Action: Country Examples

Countries with Fully Launched CBDCs

These countries are mostly developing economies, where CBDC helps fight inflation, improve financial access, and reduce cash handling costs.

Countries Piloting CBDCs