What are they?
Central Bank Digital Currencies (CBDCs) have been in and out of the news over the past few years but there’s still some confusion as to what they are, what they’re for, and what they will ultimately mean for regular people. Also referred to as Digital Base Money (DBM), or Digital Fiat Currency (DFC), they are digital versions of the national currencies issued by central banks. Their development and implementation have been discussed since Bitcoin rose to prominence in the wake of the 2008 financial crisis. This is the big thing that separates these two types of digital currency; even though CBDCs may make use of distributed ledger technology (DLT, blockchain), they are issued and controlled by central banks, and as such are an extension of central bank policy.