CBDC
A central bank-issued digital currency designed to function as legal tender.
What is CBDC?
A Central Bank Digital Currency (CBDC) is a digital asset issued and backed by a central bank, functioning as a digital form of a country’s fiat currency (e.g., digital USD or EUR). Unlike decentralized stablecoins, CBDCs are fully controlled by central authorities, ensuring stability and regulatory oversight. They aim to enhance payment efficiency, financial inclusion, and monetary policy implementation. Examples include China’s e-CNY, with over 180 million wallets by mid-2024, and pilot projects in countries like the Bahamas and Nigeria.
Related Terms
Proof-of-Stake (PoS) Ethereum
A consensus mechanism used by Ethereum to secure its network and validate transactions.
Front Running
The practice of observing pending transactions in a blockchain’s mempool and submitting a similar transaction with a higher gas fee to prioritize its confirmation, often to gain a financial advantage.
Airdrop
A free distribution of tokens to numerous wallet addresses by blockchain projects to promote awareness, bootstrap liquidity, and reward early user engagement.
Legal Tender
Currency mandated by law for debt settlement, including digital forms.
ETF
Exchange-Traded Funds that hold baskets of assets and trade on stock exchanges, providing regulated exposure to digital assets.
FDV
The total potential market capitalization of a digital asset if all tokens in its maximum supply were circulating at the current price.