Global Central Bank Digital Currency Research and Developments: Implication for Cryptocurrency

Abstract

This chapter presents a simple definition of central bank digital currency (CBDC). It also provide the similarities and differences between CBDC and cryptocurrencies. One similarity between CBDCs and cryptocurrencies is that they are both electronic forms of money. Secondly, they are both delivered on blockchain and distributed ledger technology. Thirdly, they can both be used privately to facilitate transactions where both parties agree to do so. Existing policy discussion about CBDC in Europe show that there are plans to develop a digital euro for countries in the European Union. The purpose of researching and exploring the issuance of a CBDC by European countries is to develop advanced knowledge and expertise about CBDC to enable European countries to decide the exact use case of CBDC that is appropriate for their economies. The Bahamas issued the Sand Dollar CBDC, primarily to increase financial inclusion and to prevent illicit financial flows.