What is CDBC? Understanding the new form of digital currency

CDBC (Central Bank Digital Currency), simply put, is a digital currency issued by the central banks of various countries. Unlike traditional paper money, it exists entirely in digital form but is backed by government credit.

Core Features of CDBC

Official Endorsement
Unlike decentralized cryptocurrencies, CDBC is issued and managed directly by the central bank. Each country has its own CDBC, aligned with its legal tender. For example, a CDBC launched by a country’s central bank is recognized as the official digital circulating currency of that country.

Blockchain and Hybrid Technology
Although CDBC adopts the technical logic of cryptocurrencies and operates on a blockchain, it is not fully decentralized. Instead, it is a hybrid currency—combining the transparency and efficiency of blockchain with the regulatory control of the central bank. This allows it to enjoy the convenience of digital assets while maintaining the security of traditional finance.

Privacy and Control
CDBC transactions offer a certain level of privacy, but the entire system is still monitored by the central bank. This is in stark contrast to fully anonymous cryptocurrencies—regulatory authorities can trace fund flows to prevent illegal activities.

In short, CDBC is an exploration of the future form of money, blending the security of traditional finance with the efficiency of blockchain technology.