[PDF] digital currency and central banks

Central bank digital currencies (CBDCs) are the digital form of a government-issued currency that isn't pegged to a physical commodity. They are issued by central banks, whose role is to support financial services for a nation's government and its commercial-banking system, set monetary policy, and issue currency.
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  • Is the central bank going to digital currency?

    The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash. The Federal Reserve has made no decision on issuing a central bank digital currency (CBDC) and would only proceed with the issuance of a CBDC with an authorizing law.

  • What is the role of the central bank digital currency?

    CBDC can then serve as an entry point to the broader formal financial system.
    CBDC has special aspects that may benefit financial inclusion, such as being a risk-free and widely acceptable form of digital money, availability for offline payments, and potentially lower costs and greater accessibility.

  • How is central bank digital currency different from Bitcoin?

    The key difference between cryptocurrency and CBDCs is that CBDCs are regulated and issued by the central bank, while cryptocurrencies are decentralised and unregulated.
    CBDCs, essentially digital fiat money on a centralised blockchain, therefore hold the same value as physical fiat money.

  • How is central bank digital currency different from Bitcoin?

    Types of CBDCs
    The use of CBDCs would allow banks to make payments in a quicker and more automated manner.
    Cross-border transactions may become faster and more reliable.
    In their current form, payment settlement systems work in single jurisdictions or with a single currency.

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