CBDC

Central Bank Digital Currency — a digital version of fiat money issued by a central bank, with programmable rules.

A CBDC is a digital version of a country's fiat currency, issued and controlled by its central bank. Unlike Bitcoin, a CBDC has a central authority that can mint, freeze, and reverse balances. Unlike traditional bank deposits, a CBDC can have programmable rules — money that expires on a deadline, money that can only be spent at certain merchants, money that pays negative interest if you hold it too long.

CBDCs are not a future hypothetical. China's digital yuan is in production. The European Central Bank, the Bank of England, and the US Federal Reserve are all in advanced design. The features being proposed in real central-bank papers include identity verification on every transaction, expiry dates, spending categories, and direct interest-rate transmission.

Whether you see CBDCs as a useful upgrade or a dangerous loss of monetary privacy depends on your view of the trade-off. Bitcoin sits explicitly on the other side: an alternative form of digital money where the rules are fixed and no central authority can override your transactions.

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Course topic

Privacy & freedom

Why financial privacy matters and how to keep yours when the world is going the other way.

Course topic

Inflation & money

Why prices keep rising and what to do about it. The history of money, the mechanics of inflation, and how Bitcoin breaks the cycle.

Related terms

Glossary

Fiat

Government-issued currency not backed by a physical commodity. The default form of money since 1971.

Glossary

Self-custody

Holding your own Bitcoin private keys. Nobody can freeze, seize, or lose your sats — except you.

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