# CBDC

CBDC stands for central bank digital currency, also widely referred to as digital fiat currency, or digital base money. Unlike virtual currency and cryptocurrency, CBDCs are a digital form of fiat money like USD, GBP, or EUR, and its money status is ensured by government regulation, law, and dedicated monetary authority. It is expected that public digital currencies could claim legal tender status by governments in the future, thus challenging the status quo of commercial bank deposits and contemporary payments and banking systems. Potential benefits of CBDC include technological efficiency, tax collection, monitoring and preventing illicit activities, and more financial safety. Potential drawbacks include totalitarian surveillance, financial exclusion, and bank runs on commercial banks.