A central bank digital currency, or CBDC, is a digital payment instrument denominated in the national unit of account and issued as a direct liability of the central bank.
CBDCs can be designed for use by the general public or for wholesale transactions among financial institutions. Retail CBDC would give households and businesses access to a digital form of central bank money. Wholesale CBDC is intended primarily for interbank or financial-market settlement and can add programmable or tokenized functionality to central bank money. A CBDC does not require a public blockchain, and different technical architectures can support the same underlying central bank liability.
CBDC classification follows the issuer and legal nature of the monetary claim. The technical architecture can vary. Tokenized deposits remain commercial bank liabilities, while stablecoins are privately issued instruments.
CBDCs are relevant to digital payments and tokenized finance because they can provide central bank money as a digital settlement asset.
A wholesale CBDC can be used by financial institutions to settle tokenized securities transactions in central bank money.