CENTRAL BANK DIGITAL CURRENCY (CBDC)
With the current spike in growth of crypto currencies, the world governments have been itching to get into the action, some have banned completely the use of cryptos in their countries, others have introduced legislations to regulate the industry while others have remained num and see what happens. But some countries have gone one step further and decided to compete with cryptos by introducing Central Bank Digital currencies or in short CBDC.
What is CBDC
A CBDC is a digital form of country currency or what we call fiat in the crypto world that is also owned by the central bank. The central bank issues digital coins instead of printing money that is backed by the government. The difference between a CBDC and Crypto is that crypto is decentralized (is not controlled by an individual or from one central place) while CBDC is a centralized coin run by an individual nor organization that have full control of how its produce to where it goes and how its used
The world is changing and technology is changing everything especially fintech. This has made the old system of payment to expensive and with blockchain technology gaining track and powering cryptocurrencies, it was a matter of time before government join in. CBDC has its advantages and disadvantages but that is a topic for another day. One issue that will crop up with CBDC is the matter of privacy. Cryptos offer a level of privacy that is another level, unless someone sends you there wallet address you will never know who is transacting, all is anonymous but with CBDC all info is available to the government since they are the ones issuing the coin