CBDCs explained: 146 countries are exploring central bank digital currency, three have issued one

A CBDC (central bank digital currency) 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. Apart from being digital, central bank digital currency has almost nothing in common with bitcoin: bitcoin has no issuer, a CBDC has exactly one.

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.

This explainer shows how a CBDC works, how it differs from stablecoins and bitcoin, where it already exists and which points are still disputed in Europe.

What is a CBDC? A definition of central bank digital currency

Central bank digital currency is an electronic form of a country's currency that is a direct liability of the central bank. That is also the definition the US government uses in Executive Order 14178 of January 23, 2025: money denominated in the national unit of account that the central bank stands behind directly.

Today you hold central bank money almost only as cash. Everything in your current account is so-called bank money, a promise by your bank to pay you cash on request or to transfer funds. If the bank fails, statutory deposit protection steps in for up to €100,000 per customer and bank. A CBDC would remove that intermediate step: a digital euro in your wallet would be as safe as a note in your purse, because a central bank cannot go bust the way a commercial bank can.

Technology: blockchain is optional

Many people associate CBDCs with blockchain. In fact 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. Distributed ledger technology (DLT), shared ledgers modelled on a blockchain, mainly plays a role in projects between banks.

Retail CBDC and wholesale CBDC: two forms with different purposes

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. If a bank one day delivers a tokenised bond against central bank money on a shared platform, a wholesale CBDC is behind it.

According to the Atlantic Council, 13 cross-border wholesale projects are currently under way. The retail version is politically more contentious, because it directly affects people's daily lives and banks' business models.

CBDC vs stablecoins: issuer, backing and liability compared

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: an e-money token, meaning a stablecoin that tracks a single official currency, may only be issued by an authorised e-money institution or a bank. There is no state deposit protection for it. How redemption works in a crisis is explained in our article on bank stablecoins and deposit insurance.

Tether shows how differently stablecoins are positioned. USDT, the largest dollar stablecoin, has no MiCA authorisation, and several exchanges have delisted it for customers in the EU as a result. Background on the issuer and its reserves is in our profile What is Tether (USDT)?.

The key differences at a glance

Bitcoin and CBDCs: why a fixed supply and central bank money are opposites

Bitcoin was created in 2009 explicitly as money without a central bank. Nobody can expand its supply beyond 21 million units, nobody can halt transactions centrally, and the network runs without an operator. A CBDC is the opposite model: the central bank sets supply, rules and access.

That leads to two readings you hear again and again in the debate. Critics see CBDCs as a tool for monitoring and steering payments and treat every launch as an argument for bitcoin as an alternative currency. Supporters counter that state digital money in particular reduces dependence on private payment providers and foreign stablecoins. Both views are opinions, not findings: how much data a CBDC collects depends entirely on how the law designs it.

For investors, a CBDC changes nothing about bitcoin's basic nature. Central bank digital currency is not an investment; under current plans it would pay no interest in the euro area and does not fluctuate. Investors in bitcoin are betting on scarcity and independence, while users of a CBDC simply want to pay in euros.

CBDCs worldwide: the Bahamas, Jamaica and Nigeria issue central bank digital currency

The three countries with a fully launched CBDC show one thing above all: issuing it is not enough. 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. The central bank cited low merchant participation among the reasons.

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. The Atlantic Council describes all three as countries that are working to expand domestic use despite weak adoption and technical problems.

The lesson also preoccupies the European Central Bank: a digital means of payment only catches on if merchants accept it and it offers an everyday advantage. That is why the Council and Parliament have argued for so long over a merchant acceptance obligation for the digital euro.

Digital yuan (e-CNY): the world's largest CBDC pilot

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.

In January 2026 the People's Bank of China reclassified the e-CNY: balances now count as deposits at the issuing banks. According to concurring reports, verified wallets can earn interest since then, while anonymous wallets in the lowest tier are excluded. The Atlantic Council sees this as a possible departure from the original idea of digital cash and describes further plans as open.

For the crypto industry, the e-CNY is also a benchmark because China bans cryptocurrency trading at the same time. State digital money and private crypto money do not sit side by side there; they compete directly.

Digital euro: pilot from 2027, possible issuance in 2029

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.

A law is a precondition. 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. If it does not come, the whole timetable slips.

What the digital euro is meant to change in everyday life, how the holding limit works and how to take part in the pilot are covered in detail in our article Digital euro: what it is, when it is coming and what it changes for you.

Holding limit and acceptance obligation as sticking points

Two questions dominate the negotiations. The holding limit is meant to prevent savers from moving money en masse from banks into the digital euro in a crisis; its level has not been set. The acceptance obligation determines whether merchants must accept the digital euro as legal tender, and what exemptions apply to small businesses. The fee model for merchants and the rules for offline payments are also on the table.

Privacy and CBDCs: offline payments and programmable money

Many citizens' biggest concern is privacy. Cash leaves no data trail; a digital payment does. The European Commission's draft law therefore provides for an offline version, in which payments run between two devices without an internet connection and are meant to offer a cash-like level of privacy. Online payments would be visible to the ECB only in pseudonymised form, with customer data remaining with banks and payment service providers.

A second buzzword is programmable money: money that can only be spent for certain purposes or expires after a deadline. The ECB has repeatedly said the digital euro will not be programmable money. Conditional payments are a separate matter, such as a transfer that is only triggered when goods are delivered. Such processes already exist in banking and in smart contracts on blockchains.

Whether the promises hold will ultimately be decided by the law, not the announcement. Anyone who fundamentally distrusts CBDCs can stick with crypto assets whose rules nobody can change after the fact.

The US against CBDCs: Executive Order 14178 bans central bank digital currency

The United States is taking the opposite path. With Executive Order 14178 of January 23, 2025, President Trump instructed all agencies not to take any steps to establish, issue or promote a CBDC. The order cites risks to the stability of the financial system, to privacy and to US sovereignty. According to the Atlantic Council, that makes the US the outlier among the G20, since all other members are working on a CBDC.

Washington is relying on private dollar stablecoins instead. That sharpens competition with Europe: if online payments increasingly run in dollar tokens, the euro loses importance. That is exactly the argument the ECB uses to promote the digital euro. How central bank digital currency and stablecoins are already being tested together is shown by a Bank of England trial we described in our article Digital euro and stablecoins.

mBridge and Agorá: wholesale CBDCs in cross-border payments

Payments between countries will decide what role CBDCs play in the global economy. The mBridge project links the digital currencies of several central banks, including China, Hong Kong, Thailand, the United Arab Emirates and Saudi Arabia. According to the Atlantic Council, transaction volume reached $55.49 billion, more than 95 percent of it settled in e-CNY.

The Bank for International Settlements (BIS), which had helped develop mBridge, withdrew from the project in October 2024. Its then general manager, Agustín Carstens, cited the project's maturity; observers linked the move to the debate about circumventing Western sanctions. In parallel, the BIS is pushing ahead with Project Agorá, which involves Western central banks such as the New York Fed and more than 40 private financial institutions. It tests how tokenised bank deposits interact with tokenised central bank money.

CBDCs and crypto: stablecoins remain the route until issuance in 2029

At least two more years will pass before the digital euro arrives. If you want to trade digitally in euros or dollars today and switch between crypto assets, stablecoins on a regulated exchange are the tool. Three steps help you get started:

1. Choose a regulated exchange: look for MiCA authorisation, because only then do EU custody rules apply to your coins. A selection is in the comparison of regulated crypto exchanges.
2. Pick your stablecoin deliberately: check who issues the token, whether it is authorised in the EU and how the reserves are documented.
3. Treat bitcoin as the counterpoint: if you want independence from central banks and issuers, look at bitcoin. Where to buy it cheaply is shown in the buy bitcoin comparison.

(As of November 11, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)