Quick answer
A bank deposit is a claim on a commercial bank and is insured up to a limit[4]. A CBDC would be a claim on the central bank itself[1]. A stablecoin is a claim on a private issuer backed by reserves, with no deposit insurance in the US[6].
Key points
- The key question is whose liability the money is: a commercial bank, the central bank or a private stablecoin issuer.
- Bank deposits are covered by deposit insurance up to a limit, such as $250,000 in the US or €100,000 in the EU.
- US law says payment stablecoins may not carry FDIC deposit insurance or pay interest; EU rules ban interest on e-money tokens.
- A retail CBDC would be central bank money like cash; the digital euro is planned to pay no interest and to have a holding limit.
- Only bank deposits are widely available and insured today; the digital euro could arrive in 2029 at the earliest.
On this page
#What is the short answer?
All three are digital money, but each is a promise from someone different. A bank deposit is what your bank owes you. A CBDC, or central bank digital currency, would be a direct liability of the central bank[1]; see what is a CBDC. A stablecoin is a token issued by a private company whose reserves and redemption promise back the claim[2]; see what is a stablecoin. Who owes you decides what protects you if something goes wrong.
#How do they compare side by side?
| Feature | Bank deposit | Stablecoin | Retail CBDC (digital euro plan) |
|---|---|---|---|
| Who owes you | Your commercial bank | A private issuer[2] | The central bank[3] |
| Deposit insurance | Yes, up to $250,000 (US)[4] or €100,000 (EU)[5] | No FDIC insurance for US payment stablecoins[6] | Not needed: central bank money[3] |
| Interest | Possible, set by the bank | Banned for US payment stablecoins[6] and EU e-money tokens[7] | None planned[3] |
| Legal tender | No | No | Yes, as planned for the digital euro[3] |
| Available today | Yes | Yes, on crypto platforms | No; earliest 2029 for the digital euro[8] |
Rules differ by country. This table uses US and EU rules as examples.
#Which one is protected if something goes wrong?
Bank deposits have the strongest everyday protection. FDIC deposit insurance covers $250,000 per depositor, per insured bank, for each account ownership category[4], and EU deposit guarantee schemes protect deposits of up to €100,000[5]. Our guide how deposit insurance works explains the details.
Stablecoins have no deposit insurance. The US GENIUS Act states that payment stablecoins shall not be backed by the full faith and credit of the United States or be subject to FDIC deposit insurance[6]. Instead, the law requires reserves of at least 1 to 1 in listed safe assets[6] and gives holders priority over other creditors on those reserves if the issuer becomes insolvent[9]. In the EU, holders of e-money tokens have a claim on the issuer and can redeem at par at any time without a fee[10].
A CBDC would carry no bank or issuer risk, because the central bank itself is the debtor. The ECB says the digital euro would be issued and guaranteed by the Eurosystem and would be legal tender, like banknotes and coins[3].
Worked example
Worked example: €120,000 held three ways
Hypothetical: you have €120,000 and are in the euro area. Assume a holding limit of €3,000 for the digital euro, which is only the top of the range the ECB tested; no limit has been set. Figures were computed with code.
- All in one bank: covered by deposit guarantee
- €100,000
- All in one bank: above the €100,000 limit
- €20,000
- Digital euro: maximum you could hold (assumed limit)
- €3,000
- Digital euro: amount that would stay in a linked bank account
- €117,000
- All in euro e-money tokens: covered by deposit guarantee
- €0 (redeemable at par by the issuer, not insured)
#Can each one lose value?
A euro in a bank account or a digital euro wallet is always worth one euro in that currency; the risk is the debtor failing, which deposit insurance and central bank backing address. A stablecoin's price on exchanges can move. The BIS notes that stablecoins trade in secondary markets at an exchange rate that can deviate from par[2]. In March 2023 one major dollar stablecoin fell to 86 cents after part of its reserves was trapped at a failed bank[11].
#Do any of them pay interest?
Bank deposits can, depending on the account. Stablecoin issuers will be barred from paying holders interest or yield under US law once the GENIUS Act takes effect, no later than 18 months after its July 18, 2025 enactment[6] — details in can stablecoins pay interest?, and under EU rules neither issuers nor crypto service providers may pay interest on e-money tokens, with any reward linked to how long you hold one treated as interest[7]. The ECB says no interest would be paid on digital euro holdings, just as with cash[3]. In the UK, the Bank of England says issuers of systemic sterling stablecoins should not pay interest to coinholders[12].
#Which can I actually use today, and where?
Questions to ask about any digital money
Who owes me?
A bank, a central bank or a private issuer[2].
Is it insured, and up to how much?
Check the deposit insurance limit for bank money[4].
Can I swap it back at face value?
For EU e-money tokens the issuer must redeem at par without a fee[10].
Who holds the keys or the account?
For stablecoins, read crypto custody explained.
Bank deposits are everywhere. Stablecoins are available mainly through crypto platforms and wallets. Retail CBDCs exist in only a few countries, such as Nigeria, Jamaica and The Bahamas, and use there has stayed low[13]. For the euro area, the ECB says a first digital euro could be issued during 2029 if EU legislation is adopted in 2026[8].
Common beginner mistakes when comparing them
Thinking all digital money is the same
The number on the screen hides who owes you, which decides your protection.
Assuming stablecoins are insured like deposits
US law rules out FDIC insurance for payment stablecoins[6].
Expecting a CBDC to pay interest
The digital euro is designed to pay none[3].
Putting more than the insured limit in one bank
Amounts above the limit are not covered by deposit insurance[4].
The bottom line
Bank deposits, stablecoins and CBDCs can look identical in an app, but they are promises from a commercial bank, a private issuer and a central bank. Deposits are insured up to a limit, stablecoins rely on reserves and redemption rights, and a CBDC would be backed by the central bank itself. Knowing who owes you is the quickest way to understand your risk.
Frequently asked questions
Is a stablecoin safer than a bank account?
Would a CBDC replace my bank account?
The ECB says banks and other payment providers would distribute the digital euro, and a holding limit would apply, so most money would stay in bank accounts[3].
Why can't stablecoins pay interest?
Which is legal tender?
Only central bank money: cash today, and a digital euro if issued[3].
Sources
- Executive Order 14178: Strengthening American Leadership in Digital Financial Technology — Federal Register (Executive Office of the President), 2025 Primary
- Annual Economic Report 2025, Chapter III: The next-generation monetary and financial system — Bank for International Settlements, 2025 Primary
- FAQs on the digital euro — European Central Bank, 2026 Primary
- Understanding Deposit Insurance — Federal Deposit Insurance Corporation, 2026 Primary
- Deposit guarantee schemes — European Commission (DG FISMA), 2026 Primary
- Public Law 119-27 — Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) — US Government Publishing Office (govinfo), 2025 Primary
- MiCA Article 50 — Prohibition of granting interest — ESMA Interactive Single Rulebook (Regulation (EU) 2023/1114), 2023 Primary
- Eurosystem moving to next phase of digital euro project — European Central Bank, 2025 Primary
- 12 U.S. Code § 5910 — Treatment of payment stablecoin issuers in insolvency proceedings — Legal Information Institute, Cornell Law School, 2025
- MiCA Article 49 — Issuance and redeemability of e-money tokens — ESMA Interactive Single Rulebook (Regulation (EU) 2023/1114), 2023 Primary
- In the Shadow of Bank Runs: Lessons from the Silicon Valley Bank Failure and Its Impact on Stablecoins (FEDS Notes) — Board of Governors of the Federal Reserve System, 2025 Primary
- Sterling-denominated systemic stablecoins: policy statement — Bank of England, 2026 Primary
- Central Bank Digital Currency: Further Navigating Challenges and Opportunities (policy paper) — International Monetary Fund, 2025 Primary
.jpg){kind=link}
