What are CBDCs?

A central bank digital currency (CBDC) is a new form of money issued electronically by a central bank. Central banks are looking to issue their own digital currencies to improve the payment system, given the increase in electronic payments and the decline in the use of cash, but also because the emergence of unregulated private payment instruments, such as stablecoins, may jeopardise financial stability.

In July 2021, the Governing Council of the European Central Bank (ECB) decided to launch a digital euroOpens in new window project (see press releaseOpens in new window). The ECB is currently working on preparations for its possible issuance.