Short answers, pulled from the story.
A central bank digital currency, or CBDC, is a digital version of an official currency created by a central bank rather than a private company. Unlike cryptocurrencies such as Bitcoin, a CBDC is issued by a state and may circulate alongside physical cash.
As of 2024, the Bahamas, Jamaica, and Nigeria have launched CBDCs, and nine countries plus the eight islands of the Eastern Caribbean Currency Union have launched one overall. Named examples include the Bahamas' Sand Dollar, the Eastern Caribbean Central Bank's DCash, Nigeria's e-Naira, Jamaica's JamDex, China's digital renminbi, India's Digital Rupee, and Russia's Digital Ruble.
Florida was the first US state to pass a law banning state payments made using a central bank digital currency, citing privacy concerns.
A central bank digital currency is issued and centrally controlled by a state, while Bitcoin and other cryptocurrencies are not issued by any government. A CBDC likely would not need a blockchain or distributed ledger, even though that technology originally inspired the concept.
Critics warn that a central bank digital currency could give governments broad surveillance power over financial transactions and enable social control, including expiring or restricted money. Other cited risks include banking system disintermediation, cybersecurity threats to critical payment infrastructure, and centralized control over individual accounts.
The People's Bank of China began researching the idea of issuing a CBDC in 2014. China's digital RMB later became the first digital currency issued by a major economy.