# Central Bank Digital Currency (CBDC)

*Banking & Payments — Finicade finance glossary*

A CBDC is central bank money issued digitally to the public — a direct claim on the central bank rather than on a commercial bank. Motivations range from payment efficiency to preserving monetary sovereignty against private stablecoins. The unresolved problem is disintermediation: if households can hold risk-free central bank money directly, deposits could drain from banks in exactly the moment a crisis makes them fragile.

**Also known as:** CBDC, digital dollar, digital euro

**Related terms:** [Stablecoin](https://finicade.com/glossary/stablecoin), [Real-Time Payments](https://finicade.com/glossary/real-time-payments), [Central Bank](https://finicade.com/glossary/central-bank), [Deposit Insurance](https://finicade.com/glossary/deposit-insurance), [Money Supply](https://finicade.com/glossary/money-supply)

Source: https://finicade.com/glossary/central-bank-digital-currency