What is a CBDC? Central bank digital money, simply explained
By SendPay Business · · 2 min read
A central bank digital currency, or CBDC, is digital money issued directly by a country's central bank. It would be a claim on the central bank itself, like cash, rather than a balance held with a commercial bank.
How a CBDC differs from what you have now
The money in a normal bank account is a promise from that bank. Cash is a promise from the central bank. A CBDC would put central bank money in digital form, usually held through apps and wallets offered by banks and payment firms.
CBDC vs crypto and stablecoins
- Crypto such as Bitcoin has no central issuer and its price moves freely.
- Stablecoins are issued by private companies and aim to track a currency.
- A CBDC is issued by the central bank and is worth exactly the national currency.
The digital pound
The Bank of England and HM Treasury have been exploring a possible digital pound. Check the Bank of England's website for where that work currently stands.
Where SendPay fits
SendPay platforms give your customers GBP, EUR and USD accounts, cards and transfers under your own brand today, powered by licensed partners. SendPay tells you in writing which licences apply to your platform before you pay.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.