Central bank digital currency

Central Bank Digital Currency seems like cryptocurrency but has a few different attributes:

• Centralized issuer. The CBDC can’t be earned by mining or staking like usual cryptocurrencies. Only the national regulator (usually it is the central bank of government) can issue new digital coins.
• Legal status. The CBDC is legal in the country that issued it. In the future it will be legal in other countries.

• The fastest transactions. Digital currency may be transferred directly to the owner by the regulator without intermediaries (commercial banks)
• Reducing maintenance costs of fiat currency. The CBDC doesn’t need to create paper banknotes, transporting in countries, loading in bankomats, changing old damaged bills into new ones, etc.
• The exchange rate is provided by the economy of the government.

• Absence of anonymity. The regulator can see all transactions by every user.
• Forced payment. The regulator can take out money from your wallet as tax, fines, etc. without your permission.
• Sanctions. The government can use sanctions against companies, blocking their agreements, contracts, money transfers.

The People's Bank of China started researching CBDC in 2014. But until 2019 all research was a secret. In October 2019 Chinese president Xi Jinping has talked about a huge perspective in blockchain technology. After his speech, the bank published a press release about DCEP - chinese cryptocurrency. It's the first in the world CBDC that is close to launch for сitizens. Now the chinese CBDC is testing in a few cities.

In 2022 the Swiss National Bank successfully tested the integration of CBDC with commercial and financial institutions. In testing took part Goldman Sachs, Citi, Credit Suisse, Hypothekarbank Lenzburg and UBS. National Bank tested integrating CBDC into their bank systems, trying to transfer money between them and cross-border.

“To continue fulfilling their mandates of ensuring monetary and financial stability, central banks need to stay on top of technological change. Project Helvetia is a prime example of how to achieve this. It allowed the SNB to deepen its understanding of how the safety of central bank money could be extended to tokenized asset markets,” said Andréa M. Maechler, Member of the Governing Board, Swiss National Bank.