// GLOSSARY -- PAYMENTS & FINTECH

What is Digital Currency?

1 min read Updated

Digital currency is any form of money that exists purely in electronic form — encompassing cryptocurrencies, stablecoins, CBDCs, and digital representations of traditional currency.

WHY IT MATTERS

Digital currency is the broadest category: any money that's electronic. This includes crypto (Bitcoin, Ethereum), stablecoins (USDC, USDT), CBDCs (digital yuan, digital euro), and even digital bank deposits (most money in your bank account is already digital).

The key distinction is between: decentralized digital currency (crypto, no central authority), centralized digital currency (CBDCs, central bank controlled), and private digital money (stablecoins, company-issued).

The digital currency landscape is converging: central banks studying CBDCs, stablecoins achieving regulatory frameworks, and crypto finding its role as permissionless money. The future is digital — the debate is about who controls it.

FREQUENTLY ASKED QUESTIONS

Is crypto the same as digital currency?
Crypto is a type of digital currency — specifically, decentralized digital currency. Not all digital currency is crypto (CBDCs are centralized, digital bank money is traditional).
What is CBDC?
Central Bank Digital Currency — digital money issued directly by a central bank. Unlike crypto, CBDCs are centralized, government-controlled, and may enable transaction monitoring.
Will digital currency replace cash?
Physical cash is declining globally. Digital forms (bank deposits, crypto, CBDCs) are growing. Full replacement is unlikely near-term but the trend is clearly toward digital-first money.

FURTHER READING

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