Quick answer
CBDC stands for central bank digital currency: a form of digital money, denominated in the national currency, that is a direct liability of the central bank[1]. Retail CBDCs would be used by the public like digital cash; wholesale CBDCs are for banks. Most central banks are exploring one[3].
Key points
- A CBDC is owed by the central bank, unlike a bank deposit (owed by a commercial bank) or a stablecoin (owed by a company).
- Retail CBDCs are for everyday payments by the public; wholesale CBDCs settle payments between financial institutions.
- 91% of 93 central banks surveyed by the BIS were exploring a CBDC, but very few have launched a retail one.
On this page
#What does CBDC mean in simple words?
Cash is the only central bank money most people hold today. A CBDC would be a digital version: an amount in your national currency that the central bank itself owes you. A US executive order defines it as digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank[1]. The ECB describes its planned digital euro as a digital form of cash that would complement banknotes and coins, not replace them[2].
#What is the difference between retail and wholesale CBDC?
A retail CBDC is for households and businesses to pay with. A wholesale CBDC is used only by banks and other financial institutions to settle large payments. The BIS's survey of 93 central banks found that 91% were exploring a retail CBDC, a wholesale CBDC or both, and that wholesale work had progressed further overall[3].
Worked example
Example
Imagine the digital euro launches with a holding limit. The ECB says users could hold only a limited amount, and at lawmakers' request it tested hypothetical limits of up to €3,000[2]; no limit has been set. If your limit were €3,000 and you received €3,500 into a wallet linked to your bank account, €3,000 would stay as digital euro and €500 would go to the bank account (computed with code).
#Is a CBDC the same as a stablecoin or crypto?
No. A stablecoin is issued by a private company, and most crypto-assets have no issuer promising a fixed value. A CBDC is central bank money, always worth one unit of the national currency. The US has gone the other way: Executive Order 14178 prohibits federal agencies from establishing, issuing or promoting CBDCs[1]. For the full picture, read what is a CBDC and stablecoin vs CBDC vs bank deposit.
Frequently asked questions
Would a CBDC pay interest?
The ECB says the digital euro would pay no interest, like cash in your wallet[2].
Can I use a digital euro yet?
No. The ECB says the Eurosystem could be ready for a first issuance during 2029, and the final decision will only be taken once EU legislation is adopted[4].
Sources
- Executive Order 14178: Strengthening American Leadership in Digital Financial Technology — Federal Register (Executive Office of the President), 2025 Primary
- FAQs on the digital euro — European Central Bank, 2026 Primary
- Advancing in tandem: results of the 2024 BIS survey on central bank digital currencies and crypto (BIS Papers No 159) — Bank for International Settlements, 2025 Primary
- Eurosystem moving to next phase of digital euro project — European Central Bank, 2025 Primary
