Finance
Central Bank Digital Currency (CBDC)
Definition
A digital form of a country's fiat currency issued by the central bank — essentially digital cash backed by the government.
Explanation
China's e-CNY is the most advanced major-economy CBDC. Over 130 countries are exploring CBDCs. Motivations include financial inclusion (reaching the unbanked), payment efficiency, countering cryptocurrency, and maintaining monetary sovereignty. Privacy concerns and commercial bank disintermediation are key challenges.