A central bank digital currency is a digital form of a country's own money, issued directly by its central bank. Many central banks are researching or piloting one, and the UAE has its own digital dirham project.
The easy mistake is to lump CBDCs in with crypto. They share the digital format and little else. A CBDC is a direct liability of the central bank, with rules set by the issuer. A stablecoin is issued by a private company and backed by reserves it manages. Bitcoin has no issuer at all. Three different trust models - and knowing which one you hold tells you exactly who you are relying on.
đŹ Would you rather hold a CBDC, a stablecoin, or neither - and why?
Binance Academy covers this in more depth: https://www.binance.com/en/academy/glossary/central-bank-digital-currency-cbdc
Next lesson: Wrapped tokens: the same asset in a different jacket
Trading crypto from Dubai since 2019.
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