central bank digital currency (CBDC) is a digital form of cash issued by a nation's central bank. Digital forms of currency are already widely used today. When you swipe your debit or credit card instead of using cash, or when you are paid via direct deposit, the associated financial institution must digitally record the transaction and update your account balance.

A CBDC would support systems already established by private financial institutions by issuing a digital fiat currency that has the full backing of a central bank. In most countries, the only type of central bank money available to the public are physical banknotes.

Interest in CBDCs has skyrocketed in recent years. According to the Atlantic Council—an independent think tank headquartered in Washington, D.C.—a total of 87 countries are exploring issuing a CBDC as of March 2022. Less than two years prior, in May 2020, just 35 countries were considering a CBDC.1

This article will focus on some of the largest countries currently developing a CBDC.