close
6 Pages
Back to Glossary
National Digital Currencies
What are national digital currencies?
National digital currencies, also known as central bank digital currencies (CBDC), can be generally understood as digital liabilities issued and backed by a central bank, denominated in an existing sovereign currency, used to exchange or store value, and considered legal tender. They are a digital fiat complement to paper banknotes and coins. Unlike a cryptocurrency, a national digital currency represents a claim on a central bank (like cash) and is backed by the full faith and credit of the issuing government, reducing the risk of holding it.