The disadvantages, however, are as follows:

Not universally accepted

No regulation by Government

18.3 CBDC

The central bank digital currency or CBDC is a digital currency

issued by the central bank of a nation that leverages some benefits

of cryptocurrencies by using the distributed ledger technologies at its

back. But does it not sound exactly like a Stablecoin? Perhaps, yes.

However, the biggest difference between them is that, while most

Stablecoins are created by private financial institutes, CBDC is

issued by the central bank, and hence, it’s a legal tender that can be

strictly regulated by the monetary authorities of a nation. Hence,

CBDC can be termed as “A Centralized Cryptocurrency” and is

universally acceptable.

18.3.1 CBDC Types

CBDC can be categorized into two types depending upon its

targeted users, i.e., wholesale and retail.

18.3.1.1 Wholesale CBDC

Wholesale CBDC deals with the tokenization of digital money issued

by the central bank, built with the goal of resolving liquidity and

counterparty risk issues. As shown in Figure 18.4, they can work in

scenarios where there is need of interbank instant settlements or

instant international money transfer, as follows: