A synthetic CBDC is a policy model in which private institutions issue digital money that is fully backed by central bank reserves or another direct claim on central bank money.
The term was introduced in IMF policy discussions to describe an arrangement that combines private-sector customer service and innovation with central-bank-quality backing. The private issuer remains responsible to the user unless the legal design creates a direct claim on the central bank. Full backing by central bank reserves can reduce asset risk, but governance, operational, legal, and intermediary risks remain with the private arrangement.
A synthetic CBDC generally remains a private liability backed by central bank money. A conventional CBDC is issued as a direct liability of the central bank.
The model illustrates how public settlement assets and private payment services can be combined without requiring the central bank to operate every customer-facing function.
A regulated payment provider could issue digital tokens one-for-one against reserve balances held at the central bank while providing wallets and payment services to users.