Central Bank Digital Currency
Central Bank Digital Currency (CBDC) is a digital form of a country's fiat currency, issued and regulated by its central bank. It represents a direct liability of the central bank, unlike cryptocurrencies or private digital currencies, and is designed to function as legal tender for transactions and store of value. CBDCs aim to modernize payment systems, enhance financial inclusion, and provide a secure digital alternative to physical cash.
Developers should learn about CBDCs as they are becoming a critical area in fintech and blockchain development, with many countries exploring or piloting implementations. This knowledge is essential for roles in central banks, financial institutions, or tech companies working on digital payment systems, as it involves understanding monetary policy, blockchain technology, and secure transaction processing. Use cases include cross-border payments, programmable money for smart contracts, and improving access to banking services in underserved regions.