CBDC Without Myths: Control or Convenience?

When the topic of CBDCs comes up, many people instinctively picture a scene from the dystopias of Orwell, Huxley, or Bradbury — a totalitarian society where there is no room for privacy and total control reigns over every sphere of human life: thoughts, actions, and, of course, finances.

It looks a bit unsettling… but, to be honest, it is not that far from reality.

So what is a CBDC?

A CBDC is a digital form of a national currency, issued and backed by a country’s central bank, which exists exclusively in electronic form and is legal tender.

And that raises a question for many people: if a CBDC is a digital currency that runs on blockchain, then does that mean…

Is a CBDC a cryptocurrency?

Formally — yes, but there’s a catch. Central banks plan to use blockchain technology not to make the system decentralised (as the creators of the technology intended), but the opposite — to make it максимально centralised, without any anonymity and with full control over issuance and users’ transactions. They need blockchain solely for security, speed, and the oversight capabilities that come with using a distributed ledger.

Unlike the cryptocurrencies we are used to, there is no place in a CBDC for private miners or node validators; forget public access to blockchain explorers or the ability to build your own solutions on top of this network — everything is controlled only by the central bank and the country’s government.

As you can see, there is not a “stone left upon a stone” of what we typically associate with cryptocurrencies. That is why it is difficult to call a CBDC a classic crypto asset. It is not one, even though it runs on blockchain. It is not a stablecoin, although it has a stable exchange rate pegged to fiat. It is state money in digital form that operates on blockchain — with all the consequences for citizens’ privacy and financial freedom.

The future with CBDCs

If you think this is just horror stories or conspiracy fantasies, or you believe that even if something like this does happen it will be in the distant future and certainly not in your lifetime, we have to disappoint you — as of February 2026, 137 countries are working on CBDC implementation, representing 98 % of global GDP combined.

So this stopped being an experiment a long time ago — it is a global transformation of the world’s monetary system that is happening right now.

In this article, we will break down what a CBDC is (central bank digital currency), why central banks worldwide rushed to create them, which countries have already launched digital currencies, and what to expect from this financial revolution.

What is a CBDC and why did it appear?

Let’s clearly formulate the definition of a CBDC.

CBDC is an abbreviation for “Central Bank Digital Currency”. It is the digital form of modern fiat currencies (the dollar, euro, yuan), issued by the central bank of the relevant country, existing exclusively in electronic form and serving as legal tender within that country.

To clearly show how CBDC technology differs from other forms of money (cash and bank money), let’s consider a comparison table:

CBDC vs cash vs bank money:

The key difference between CBDCs and cash/bank money:

• • Cash — physical notes and coins.
  • Bank money — records on bank accounts in the computer systems of banks or payment institutions.
  • CBDC — digital records in the central bank’s database (a private blockchain).

The key difference between CBDCs and bank deposits:

• • A bank deposit — a liability of commercial banks.
  • CBDC — a direct liability of the central bank (like cash, but digital).

The key difference between CBDCs and cryptocurrencies:

• • Bitcoin, Ethereum, Solana — decentralised, with no single control centre.
  • CBDC — centralised, fully controlled by the central bank and the state.

Why are central banks creating CBDCs?

1. A response to declining cash usage

In many countries, cash is “dying” a natural death. For example, according to statistics, cash payments account for 10–13% of all transactions in Sweden, 10–15% in China, and 20–25 % in South Korea. Roughly the same picture exists across all developed countries — cash payments are shrinking and make up no more than 20–25%. Cash remains key mainly for countries with unstable economies.

2. The cost of printing cash

Printing, transporting, and storing cash costs countries up to 1.5 % of GDP each year. For example, imagine this: India’s government spent roughly US$760 million just on producing banknotes in 2024–2025.

3. Competing with stablecoins

Private stablecoins (USDT, USDC) process trillions of dollars in transactions. In 2025, their total volume reached a record US$33 trillion, which is 72% more than the previous year. Central banks fear that private companies could create a parallel monetary system outside state control.

4. Financial inclusion

More than 1.7 billion people worldwide do not have access to banking services. A CBDC can give them a digital wallet via a smartphone without the need to visit a bank and open an account.

5. Monetary policy

A CBDC gives central banks new monetary-policy tools:

• • Negative interest rates (your money loses value if you do not spend it).
  • Programmable money (for example, social support that can only be spent on food or medicine).
  • Instant economic stimulus (direct crediting of funds to citizens).

6. Geopolitics and sanctions

China and other countries are developing CBDCs as an alternative to the US dollar and the SWIFT system. This is a tool of financial sovereignty.

7. Social engineering tools

Introducing CBDCs gives the state unprecedented tools of control and social engineering in terms of scale. For example:

• • the ability to ban the purchase of certain goods or services for specific individuals;
  • instant punishment: freezing access to funds without a court decision if a citizen’s behaviour appears “suspicious” to the state;
  • programmable money with an “expiry date”, geolocation restrictions, or a specific target purpose.

8. Fighting the shadow economy

Using CBDCs for illegal purposes is almost impossible, so rolling out this tool will deliver a powerful blow to the shadow economy and illegal money-laundering schemes.

9. Counter-terrorism

CBDCs are also intended to put an end to negative phenomena such as extremism and terrorism. With existing means, it is unlikely this “hydra” can be defeated without introducing total financial control — it seems this is viewed as the only chance to deal with evil.

The history of CBDC development

The experimental era (1990–2014)

The first CBDC prototypes were offline smart-card systems. Later, with the emergence of blockchain technology, private blockchains and hybrid platforms began to be used for launching CBDCs.

1993 Finland — Avant

The Bank of Finland issued the Avant electronic card — the world’s first experiment with a central bank digital currency. The project was discontinued in 2006 due to low user popularity and competition from more convenient alternatives offered by Visa/Mastercard.

2014 Ecuador

Ecuador’s central bank launched the mobile payment system “Dinero Electrónico”. It operated until 2018 but never became popular.

2014 China

The People’s Bank of China (PBOC) began research into a digital yuan — the start of the most ambitious CBDC project in history.

The era of first launches (2020–2026)

As of 2026, four countries (the Bahamas, Nigeria, Jamaica, Zimbabwe) have already fully implemented their own retail CBDCs.

2020 The Bahamas (Sand Dollar)

The first country to fully launch a retail CBDC. Population: 400,000.

2021 Nigeria (eNaira)

The first African country with a CBDC. Population: 220 million. Adoption is slow due to low public trust in the government.

2022 Jamaica (JAM-DEX)

Implementation of the JAM-DEX CBDC for an island economy with a population of 3 million.

2024 Zimbabwe (ZiG — Zimbabwe Gold)

A CBDC backed by gold and foreign currency to fight hyperinflation.

The era of full transition (2026–2030)

Today, 49 countries are actively running pilot programmes and preparing to implement their own CBDCs. Let’s look at information on active pilot projects in some countries:

In addition to this list, 72 countries are currently in an expanded testing phase for their own CBDC projects, and 137 countries are exploring the possibility of launch.

Technical features of CBDCs

Some countries choose centralised database technology for their CBDCs, others choose a private blockchain controlled by the central bank, or even a hybrid model. All these options have their advantages and disadvantages.

In Europe, a hybrid model is being considered: the central bank issues the “digital” currency, while familiar banks simply provide a convenient interface in an app. That is, for the end user almost nothing changes, except that every transaction will now be monitored not only by the bank, but also directly by the state. The European Central Bank considers this model a compromise: it preserves the role of banks and reduces the risk of bank failures.

In addition to the technological differences, CBDCs also differ functionally. There are two types: Retail CBDC and Wholesale CBDC, each with its own use case.

Retail CBDC (Retail CBDC)

This CBDC is intended for the public and businesses. Its goal is to replace cash in everyday transactions.

Wholesale CBDC (Wholesale CBDC)

This CBDC is created for banks and financial institutions. It will be used exclusively for large interbank payments and reserves.

Offline functions

Some CBDCs (e-CNY, Digital Euro) will have additional features supporting offline payments via NFC (Near-Field Communication). This will allow transactions without internet access. Almost like cash, but digital.

Overview of the largest CBDC projects

China and its digital yuan (e-CNY)

Status: the largest pilot project in the world
Launch: officially 1 September 2023 (testing since 2019)
Population: 1.4 billion

Statistics:

• • Transactions: 3.48 billion operations totalling 16.7 trillion yuan (US$2.37 trillion)
  • Growth: +800% since 2023
  • Wallets: 2.25 billion digital wallets (more than the population!)
  • Average spend: ~428 yuan (US$60)

Technology:

• • Proprietary Dashing protocol (developed by the PBOC Digital Currency Institute)
  • Offline payments via NFC
  • Integration with Alipay and WeChat Pay

International expansion: on 17 March 2025, China launched an e-CNY cross-border settlement system connecting 16 countries (10 ASEAN + 6 in the Middle East). This is an alternative to SWIFT that does not rely on the dollar.

Project mBridge: a multi-currency CBDC platform for interbank settlements between China, Thailand, the UAE, Hong Kong, and Saudi Arabia. Transaction volume reached US$55.49 billion — a 2,500x increase since 2022. 95% of the volume is e-CNY.

Issues: despite aggressive government promotion, Chinese users prefer familiar Alipay and WeChat Pay. Authorities are forced to introduce incentives and mandatory integrations.

Geopolitical aspect: China positions e-CNY as a tool for de-dollarisation and bypassing sanctions. PBOC Governor Pan Gongsheng said in June 2025 that e-CNY is part of a “multipolar international monetary system”, hinting at competition with the dollar.

India and its digital rupee (e-Rupee)

Status: the second-largest pilot after China
Launch: December 2022
Population: 1.4 billion

Statistics:

• • Volume: 10.16 billion rupees (US$122 million)
  • Growth: +334 % since 2024
  • Features: offline payments, programmable money, settlements for government securities

What’s unique: India allowed non-bank institutions to issue e-Rupee wallets to distribute among people without bank accounts.

The EU and its Digital Euro (Digital Euro)

Status: preparatory phase
Launch: 2026–2027
Population: 450 million (19 Eurozone countries)

Timeline:

• • November 2023: the ECB moved into the preparatory phase
  • January 2024: the first draft rulebook was published
  • 2024–2025: selection of technical providers
  • Possible launch: 2026–2027

Model: intermediary — the ECB issues the Digital Euro, while commercial banks provide services to users.

Key requirements:

• • Privacy (but not anonymity)
  • Offline functionality
  • Integration with modern payment systems
  • Limits on holding amounts (to avoid undermining the banking system).

The UK and its digital pound (Digital Pound, unofficially “Britcoin”)

Status: research
Launch: not determined
Population: 68 million

The UK has taken a balanced but active position on creating its own central bank digital currency (CBDC). And although the Bank of England and HM Treasury have not yet given a final “yes” to launch, the development of the Digital Pound architecture is moving forward quite actively.

What’s unique: the Bank of England says that if a CBDC is launched, neither the government nor the Bank itself will have access to users’ personal data. They will only see technical transactions.

Model: similar to the Digital Euro — an intermediary model.

Ukraine and its e-hryvnia

Status: active development phase
Launch: in the coming years
Population: 39 million

The first pilot project took place back in 2018. At that time, the National Bank of Ukraine (NBU) conducted closed testing of the e-hryvnia platform based on the Stellar blockchain technology for retail payments.

What’s unique: it is already known that the “feature” of the Ukrainian e-hryvnia will be programmability (Smart Money). That is, the NBU wants to make it possible to programme the purpose of payments.

Current status: as of today, the NBU continues to work actively on launching its own CBDC — the e-hryvnia — which depends on pilot results and the security situation in the country.

Opponents of CBDCs

To support this position, President Trump signed a number of legislative initiatives:

• • January 2025 — an executive order banning CBDCs for the public.
  • March 2025 — publicly supported regulated stablecoins after creating a strategic reserve of Bitcoin and other digital assets.
  • July 2025 — signed the GENIUS Act and the Clarity Act — legislation regulating stablecoins.

Arguments against CBDCs:

• • a threat to privacy;
  • an instrument of total control;
  • undermining the role of commercial banks.

Strategy: to keep the dollar as the dominant world currency in the coming decades, despite de-dollarisation forecasts, and to do this through USDC and USDT rather than through a state CBDC.

Canada and Australia followed the US.

Both countries abandoned a retail CBDC after years of research. Their central banks reached the same conclusion: modern payment systems work efficiently enough, while a CBDC creates risks to banking stability without obvious advantages. As an alternative to implementing a CBDC, the Bank of Canada recommends integrating stablecoins (USDC, PYUSD) into its banking system. Australia’s government is also planning to develop AUD stablecoins to reduce dependence on the dollar.

Pros and cons of CBDCs

Benefits of CBDCs

• • Financial inclusion — access to digital money without a bank account.
  • Speed — instant 24/7 payments, including international.
  • Low fees — near-free transactions.
  • Lower costs — savings on printing cash (up to 1.5 % of GDP).
  • Anti-money laundering — full transaction transparency for authorities.
  • Monetary policy — new tools to stimulate the economy.
  • Security — central bank backing, no credit risk.
  • Programmability — automation and conditional payments.

Drawbacks and risks of CBDCs

• • Total control — the state can see every transaction.
  • Zero privacy — the end of financial anonymity.
  • An instrument of coercion — the ability to freeze accounts and programme spending.
  • Bank run risk — people could withdraw money from banks en masse.
  • Vulnerability to cyberattacks — a single point of failure.
  • Technical outages — power/internet failures = no access to money.
  • Geopolitical weapon — CBDCs as a tool of sanctions and economic warfare.
  • Undermining commercial banks — fewer deposits = less lending.

The future of CBDCs

• • If CBDCs are created with respect for privacy and freedom, they could become a convenient tool for everyday payments.
  • If CBDCs become an instrument of total control, they are a threat to financial mobility.

Who is interested in CBDCs?

• • Governments — controlling the economy, fighting money laundering, new monetary-policy tools.
  • Central banks — preserving their role in the era of digital money.
  • Fintech companies — new opportunities for integration and services.

Conclusion

A CBDC is not only a technological innovation, but also a fundamental change in the very nature of money, which will irreversibly affect privacy, freedom, the economy, and geopolitics over the coming decades.

We are sure that, having read this far, you understand: the question is no longer “will there be a CBDC?” but “when exactly” and “what will it mean for ordinary people?” The process is underway. The train called “CBDC” has not just left the station — it is racing at full speed, gaining momentum.

All that remains is to understand where it is heading, and decide: are you ready for this journey, or will you watch it pass by?