Remember a few years ago, when the most digital thing about money was using a credit card to pay for a purchase? Then came along cryptocurrencies, which took a bit of time to get used to but after you were able to wrap your head around blockchain technology, seemed to make sense. There was Bitcoin, the so-called “King of Crypto,” which reigned supreme for a few years, and nowadays it seems there is a new crypto popping up every day. However, the newest digital currency to hit the headlines is CBDC, short for Central Bank Digital Currency. In this iFOREX News article, we’ll take a look at what CBDC is, and what potential it has to change the way the world uses money.
What is CBDC?
In short, Central Bank Digital Currency is a digital version of so-called “fiat money,” or the regular currency a country uses, as established and regulated by its government. For example, in the United States of America it’s the US dollar, in Argentina it’s the Argentine peso, in Japan it’s the yen, in Mexico it’s the Mexican peso, and so forth. This digital currency could then be used by people and businesses to make payments, without having to get the physical money (also known as “paper money”) involved.
We know what you’re thinking: this sounds an awful lot like cryptocurrency. And the truth is, it kind of is and kind of isn’t.
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