CBDC

An acronym for “Central Bank Digital Currency” which refers to a digital currency issued by the central bank of a nation. Their value is pegged to the local currency. CBDCs are digital versions of a country's official currency, designed to combine the benefits of digital payments with the stability and trust of traditional fiat money. Unlike cryptocurrencies like Bitcoin, CBDCs are centrally regulated and issued by the country's central bank. They can be used for everyday transactions, much like cash or bank transfers, but with enhanced efficiency and traceability. For example, Nigeria's eNaira is an example of CBDCs. Governments adopt CBDCs to promote financial inclusion, reduce transaction costs, and enhance the effectiveness of monetary policies.