CBDC explained: what central bank digital currency is - CryptoTicker.io

A CBDC is digital money issued by the central bank itself, which is directly liable for it, just as it is today for coins and notes. That sets a CBDC apart from your bank balance, which is a claim on a commercial bank, and from stablecoins, which are backed by private companies.

According to the Atlantic Council's CBDC Tracker (as of May 2026), 146 countries and currency unions are working on a CBDC. Together they account for more than 98 percent of global economic output; in May 2022 the count was just 87.

Only three countries have fully launched a central bank digital currency so far: the Bahamas, Jamaica and Nigeria. For investors in the euro area the topic is still close to home, because the digital euro is currently planned for 2029 and would then compete directly with euro stablecoins you can already buy on crypto exchanges.

Technology and Types

Many people associate CBDCs with blockchain, but the technology is open. Most central banks rely on central databases they run themselves, because they have to process thousands of payments per second and do not want to give up control.

Two very different projects go by the name CBDC. A retail CBDC is meant for citizens and merchants: digital cash you use in shops, online or from person to person. The digital euro, the digital yuan and the Bahamas' Sand Dollar belong to this group.

A wholesale CBDC is used only between banks and financial institutions. It is meant to make large payments, securities transactions and cross-border transfers faster and cheaper. Retail investors never see it, but it can shape the market for tokenised securities.

CBDC vs Stablecoins

At first glance CBDCs and stablecoins look alike: both are digital units meant to hold a fixed value in euros or dollars. The difference lies in who stands behind them and what happens when something goes wrong.

A stablecoin is a claim on a private company. The issuer promises to redeem every token one for one in euros or dollars and holds reserves of bank deposits and short-dated government bonds for that purpose. In the EU, the MiCA crypto regulation governs such tokens.

The key difference is liability: a CBDC is backed by the central bank, while stablecoins are backed by private companies. There is no state deposit protection for stablecoins.

Global CBDC Progress

The Bahamas launched the Sand Dollar in 2020 as the world's first retail CBDC. According to figures cited by the payments consultancy CMSPI, Sand Dollars worth around $1.4 million were in circulation in January 2024, less than 1 percent of the country's cash.

Nigeria introduced the eNaira in 2021. In 2023 the International Monetary Fund found that 98.5 percent of eNaira wallets had never been used. Jamaica's JAM-DEX also struggles with low demand, according to available reports.

China has been testing the digital yuan in pilot regions since 2020, running by far the largest CBDC project. According to the Atlantic Council, more than 3.4 billion transactions worth around 16.7 trillion renminbi, roughly $2.3 trillion, had been processed with the e-CNY by December 2025.

Digital Euro Timeline

For readers in the euro area, the digital euro is the CBDC that matters. According to the status published by the Bundesbank, the Eurosystem has been in the next project phase since November 1, 2025.

In July 2026 the ECB selected 36 payment service providers for a pilot that is due to start in the second half of 2027 and run for twelve months. Brick-and-mortar merchants can apply to take part until November 20, 2026. A first issuance is planned during 2029.

The European Commission presented its draft on June 28, 2023, and on July 9, 2026, the European Parliament cleared the way for negotiations with the Council by 416 votes to 169, with 22 abstentions. Trilogue talks have been running since mid-July, with a political agreement targeted by the end of 2026.