CBDC

A CBDC (Central Bank Digital Currency) is digital fiat — a direct liability of the central bank, issued and redeemable by it, in electronic form. The key distinction from a stablecoin is the issuer: USDC is a private company's claim backed by dollars in a bank; a digital dollar CBDC would be the Fed's own liability, like a banknote but digital. Two design axes matter: retail CBDCs (held by consumers, like China's e-CNY) vs. wholesale CBDCs (only between banks, for settlement); and account-based vs. token-based privacy models. The trade-off everyone is arguing about is programmability and surveillance — a CBDC gives the state far more control over money than cash ever did, which is simultaneously the feature and the concern.