CBDC is NOT Cryptocurrency

Although they can both be used as digital currencies, the main difference between central bank digital currencies (CBDCs) and cryptocurrencies lies in their issuance and backing.

• Central Bank Digital Currencies (CBDCs): These are a digital form of a country’s fiat currency issued and backed by its central bank. They are then monitored and regulated by the government. CBDCs claim to help promote financial inclusion, simplify monetary policy, and help explore the potential impacts on economies, however, CBDCs are really a more controllable dollar giving the government the ability to enact policies through your money. This means the governments will have the ability to tell you when and where you can spend your money, and they can turn it off at any time. Do you want the government to be your bank?

• Cryptocurrencies: Unlike CBDCs, cryptocurrencies are not issued or regulated by governments or a central authority. They operate on decentralized systems and are exchanged directly between users.

  Cryptocurrencies use special codes (cryptography) to secure transactions and control the creation of new units. They use blockchain technology which is a digital ledger enforced by a network of computers. This network of computers makes it nearly impossible to counterfeit. Because no one person or entity can control them, it is much harder to be regulated or manipulated. They are designed to be secure, transparent, and unchangeable, along with offering benefits such as privacy, and quick transactions.

In summary, CBDCs are regulated and centralized, while cryptocurrencies remain unregulated and decentralized.

For more information, check out the Cryptocurrency page.