Currently, many countries/governments create CBDC (Central Bank Digital Currency), which is a digital currency that is regulated and controlled by the central bank both in terms of money supply and usage.Basically CBDC is a country's fiat money in a digital version, and works with a ledger system that runs on the blockchain network. The way CBDC works is regulated by the authorities/government, so it's not pseudonymous, but CBDC will make it easier for people to transact digitally without needing physical money. But until now, many people think CBDC and cryptocurrency are the same, even though they are actually very different.
What are the Differences between CBDC and Cryptocurrency?
- Thread starter Suba
- Start date
I think one of the main differences is that cryptocurrencies are mostly public and decentralized blockchains where the power lies with the users and you have the power and control over your money, and in CBDCs the money is issued by a third party that controls the movements the issuance, banks only have access to the blockchain records themselves, and can freeze or put arbitrary rules on such currencies.
- Thread starter
- #3
I totally agree with your opinion, the main difference between CBDC and cryptocurrency if we look at the blockchain, crypto uses a public blockchain that can be accessed by anyone, while CBDC uses a private blockchain only those who can access the blockchain.
The only similarity that cryptocurrencies and CBDCs share is that they can both be transacted digitally. However, CBDCs are controlled by the government while cryptocurrencies are decentralized.
- Thread starter
- #5
I agree with you, even though there are similarities between the two being digital money, but CBDC is controlled by the government or Central Bank, CBDC also has the same value as their official money and transactions can be carried out faster, while cryptocurrency is decentralized so ownership and authority are in the hands the user.
