What is a Central Bank Digital Currency?
A CBDC is a digital form of central bank money that is widely available to the general public.
"Central bank money" refers to money that is a liability of the central bank. In the United States, there are currently two types of central bank money: physical currency issued by the Federal Reserve and digital balances held by commercial banks at the Federal Reserve.
While Americans have long held money predominantly in digital form—for example in bank accounts, payment apps or through online transactions—a CBDC would differ from existing digital money available to the general public because a CBDC would be a liability of the Federal Reserve, not of a commercial bank.
Learn more about the Federal Reserve's work on CBDC.
Read and comment on the Money and Payments discussion paper.
Related Questions
Has the Federal Reserve decided to create a CBDC?
Will a U.S. CBDC replace cash or paper currency?
Related Information
Federal Reserve releases discussion paper that examines pros and cons of a potential U.S. central bank digital currency
(January 20, 2022)