Central Bank Digital Currency

In January 2025, the US President issued an executive order prohibiting the creation of a Central Bank Digital Currency (CBDC), known as the Digital Dollar. Digital currencies exist exclusively in electronic form and are managed through computer networks connected to the internet.

Types of Digital Currencies

  • Cryptocurrency: Decentralized, operates on blockchain technology (e.g., Bitcoin).
  • Central Bank Digital Currencies (CBDCs): Centralized, issued by central banks (e.g., Digital Rupee).
  • Stablecoins: Pegged to assets like fiat currencies or commodities (e.g., Tether USDT).

Understanding CBDCs

  • Legal tender issued by central banks, recorded on their balance sheets.
  • Two types:
    • Wholesale CBDCs – For interbank transactions.
    • Retail CBDCs – For public ....
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