🟢A central bank digital currency (CBDC) is a form of digital money created and distributed by a country's central bank or government.
🟢CBDC's are intended to serve some of the same functions as cryptocurrencies like reducing transaction fees but they remain centrally controlled by the state rather than being decentralized like crypto.
🟢CBDCs allow central banks and governments to have a presence in the digital asset and blockchain ecosystem.
🟢However, because they are issued and managed by central authorities rather than governed in a decentralized manner, CBDCs should not be confused with true cryptocurrencies.
The key difference is that cryptocurrencies aim to operate independently of state monetary control whereas CBDCs are a directly state-administered digital asset.