What is the Difference Between Cryptocurrency and CBDC – Central Bank Digital Currency?
Both cryptocurrency and Central Bank Digital Currency (CBDC) have come to the attention of the world in recent times.
Cryptocurrency is any type of digital or virtual currency that uses encryption to safeguard transactions. Proof of Work and not Proof of Stake mining.
Cryptocurrencies don’t have a central issuing or regulating authority, depending instead on a decentralised system, called the Blockchain to log transactions and produce new units.
On the other hand, CBDC is a digital form of central bank money that is widely used by the public. They are based on a country’s fiat currency’s value. CBDCs are being developed in a number of nations.
If you think we are being surveilled on now, wait until CBDC’s are issued and we can’t use cash anymore and have to instead use CBDC’s only.
The first thing to remember about CBDC is that it’s not a cryptocurrency so it doesn’t have to be related to anything that caters to the crypto world. Digital currency will be regulated by a central authority or bank. Freedom Convoy in Ottawa on Feb 14, 2022, bank accounts were shut down.
Is CBDC a digital currency?
For those, who are unaware of the crypto or blockchain world, the fad CBDC is Central Bank Digital Currency, which is a government-issued digital currency and is backed by the central bank of the concerned nation.
Can you buy CBDC currency?
Retail CBDCs are issued to the general public. Under this model, consumers are able to own a CBDC in a wallet or account and use it for payments.
Will CBDC replace cash?
CBDC is sometimes thought of as equivalent to a digital banknote, although in some respects it may have as much in common with a bank deposit. Any UK CBDC would work alongside – not replace – cash and bank deposits. We will continue to provide cash for as long as the public still want it.
Is CBDC backed by a country’s central bank?
A CBDC would support systems already established by private financial institutions by issuing a digital fiat currency that has the full backing of a central bank. In most countries, the only type of central bank money available to the public are physical bank notes.
What blockchain will CBDC use?
Ethereum in particular is the most production-ready blockchain to support CBDC requirements in terms of scalability and privacy.