A central bank digital currency (CBDC) (also called digital fiat currency or digital base money) is a digital currency issued by a central bank, rather than by a commercial bank. It is also a liability of the central bank and denominated in the sovereign currency, as is the case with physical banknotes and coins. Rather than a new currency, CBDC is a form of central bank electronic money that could be used by households and businesses to make payments. A report by the Bank for International Settlements states that, although the term "central bank digital currency" is not well-defined, "it is envisioned by most to be a new form of central bank money [...] that is different from balances in traditional reserve or settlement accounts.". The present concept of CBDCs differs from virtual currency and cryptocurrency in that a CBDC is or would be issued by a state. Most CBDC implementations will likely not use or need any sort of distributed ledger such as a blockchain. Most Central Banks worldwide are now in various stages of their evaluation of launching their national digital currencies. According to ECB's chief Christine Lagarde, more than 80 central banks are looking at digital currencies. China's digital RMB was the first digital currency to be issued by a major economy. As of January 2023, five central banks have launched a CBDC: the Central Bank of The Bahamas (Sand Dollar), the Eastern Caribbean Central Bank (DCash), the Central Bank of Nigeria (e-Naira), the Bank of Jamaica (JamDex), and the Reserve Bank of India (Digital Rupee). Some states have also issued, or have considered issuing, cryptocurrencies: these include Venezuela (Petro) and the Marshall Islands (Sovereign). These cryptocurrencies are often considered with the intent of increasing a state's independence from global financial systems, such as by reducing dependence on a foreign currency or by evading international sanctions.
