·4 min read
The tokens, which are created by Central Banks around the world, digitally represent the legal currency of the country in which they are created, and are generally based on distributed ledger technology, are called Central Bank digital currency (CBDC). CBDCs, in the simplest terms, are digital currencies that a country prints to represent its own currency. Cryptocurrencies may come to mind when we say digital money, but in fact, CBDCs are different from cryptocurrencies.
What is the difference between cryptocurrencies and CBDCs?
The blockchain used by both currencies has different features. While cryptocurrencies use a system called public blockchain where all users can participate in the network and record transactions, CBDCs use a system called private blockchain, where access and changes are under the authority of a country’s Central Bank. This is completely against the concept of decentralization in cryptocurrencies.
Cryptocurrencies like Bitcoin have a certain supply and