CBDCs vs stablecoins: the future of digital money

Three kinds of digital money

Most money you use is already digital: a bank balance is simply a promise from your bank. What's changing is who issues the money and on what technology.

A central bank digital currency (CBDC) is money issued by a central bank in digital form, in the national currency, like a digital banknote. A stablecoin is a token issued by a private company and backed by reserves; our guide to how stablecoins keep their value explains the mechanics. A tokenised deposit is an ordinary bank deposit recorded on a blockchain-style ledger, so it remains a claim on the bank.

Retail and wholesale CBDCs

A retail CBDC is for everyone: households and shops use it for everyday payments, like cash in digital form. A wholesale CBDC is only for banks and other financial institutions, to settle large payments between themselves or to pay for tokenised securities.

Wholesale work is further along. In the Bank for International Settlements' 2024 survey, 38% of central banks in advanced economies were running wholesale CBDC pilots and 17% were preparing a live system, against 15% and none for retail CBDCs.

On 21 September 2026 the Eurosystem launched Pontes, which lets banks settle trades in tokenised assets with central bank money; 13 banks and four ledger operators are the first users. The BIS's Project Agorá, which brings together central banks including the Bank of England, the New York Fed and the Bank of Japan with more than 40 financial firms, reported in May 2026 that its prototype could settle cross-border payments on an all-or-nothing basis using tokenised reserves and bank deposits.

Where major projects stand

China: e-CNY. The digital yuan is the largest project, though still in its pilot phase. By the end of November 2025 it had processed 3.48 billion transactions worth 16.7 trillion yuan. On 1 January 2026 its design changed: balances in wallets run by commercial banks became bank deposits that earn interest and are covered by deposit insurance. In 2021 the People's Bank of China had described the e-CNY as digital cash that pays no interest.

Euro area: digital euro. The European Central Bank (ECB) moved the project into its next phase in October 2025. It plans a 12-month pilot from the second half of 2027, with 36 payment providers selected in July 2026, and could issue a first digital euro in 2029 if EU law is adopted in 2026. The European Parliament confirmed its negotiating position on 9 July 2026, and talks with EU governments aim to finish by the end of the year. The ECB will decide whether to issue only after the law is passed.

The Bahamas: Sand Dollar. Launched nationwide in October 2020, it was the first CBDC available to a whole country. Uptake is modest: at the end of 2024 it made up about 0.4% of currency in circulation, even though 133,481 consumer wallets, about a third of the population, had been opened. Jamaica's JAM-DEX (2022) and Nigeria's eNaira (2021) are the other long-running retail CBDCs, and Nigeria's central bank has acknowledged that eNaira adoption has been slow.

Russia, India and the UK. Russia began a mass rollout of its digital ruble on 1 September 2026: its largest banks must now offer it and large retailers must accept it, with all banks due to follow by 2028. India's e-rupee is still a pilot. In the UK, the Bank of England and the Treasury are due to decide in 2026 whether to go beyond design work on a digital pound.

United States. A January 2025 executive order barred federal agencies from any steps to create or promote a CBDC. In July 2026 Congress went further: a housing act, which became law without the President's signature, bars the Federal Reserve from issuing a CBDC "widely available to the general public", directly or through banks, until 31 December 2030. The US is backing regulated private dollar stablecoins instead.

Privacy, programmability and offline use

Privacy. The ECB says the Eurosystem would not be able to identify people from their digital euro payments, and offline payments would be as private as cash: only the payer and payee would know the details. China's e-CNY follows "managed anonymity": small payments can be anonymous, while large ones are traceable. Stablecoins run on public blockchains, where every transfer is visible to anyone even if names are not, and issuers can freeze tokens.

Programmability. Programmable money can only be spent in pre-set ways, like a voucher. The ECB says the digital euro would not be programmable money, though it could support conditional payments, such as an automatic refund when travel is disrupted. India has tried the other approach: in some regions, food subsidies were paid in programmable e-rupees that can only be spent on eligible goods at approved shops.

Offline use. A CBDC can be designed to work device to device without a connection, which matters during network outages. The digital euro is planned with an offline option, and China's central bank has studied offline payments for the e-CNY. Stablecoins need a live connection to a blockchain to move.

Tokenised deposits: the banks' answer

Banks are putting ordinary deposits onto blockchains so money can move around the clock and settle alongside tokenised assets. J.P. Morgan's JPM Coin (JPMD), a dollar deposit token on the Base blockchain, opened to its institutional clients in November 2025. Commercial banks in 30% of the jurisdictions in the BIS survey were working on tokenised deposits, and a few had launched them.

Because a tokenised deposit is still a deposit, it can pay interest and stays under bank regulation. The BIS sees tokenised central bank reserves, tokenised bank deposits and tokenised government bonds, sharing a "unified ledger", as the base of the next monetary system.

How public and private money can coexist

Today's system works because different forms of money swap one for one: a euro in your bank account, a euro coin and a euro held at the central bank are all worth exactly one euro. Central banks call this the singleness of money.

The BIS argues that stablecoins fall short on that test, and also on elasticity (supplying enough liquidity that payments never gridlock) and integrity (resisting financial crime). Its June 2026 annual report warns that their wider use could change how banks fund themselves and lend.

What central banks describe instead is a layered system. Central bank money stays at the core, as cash, bank reserves and, in some countries, a CBDC. Banks build tokenised deposits on top, and regulated stablecoins operate alongside, with laws such as the EU's MiCA and the US GENIUS Act requiring full reserves and redemption at face value. China's move to turn e-CNY wallet balances into bank deposits shows how blurred the lines can become.

What it means for everyday users

For most people nothing changes overnight: cards, banking apps and cash keep working. As the options multiply, though, it helps to know what you are holding.

• Who owes you? The central bank, your bank or a private company. That decides what happens if something goes wrong.
• What protects it? A CBDC carries no issuer risk, deposit insurance covers bank deposits up to a limit, and stablecoin holders rely on reserves and redemption rights.
• Are there limits? The digital euro would cap how much one person can hold, and the ECB has tested limits of up to €3,000. Russia caps digital ruble top-ups at ₽300,000 a month.
• What does it cost? Basic use of the digital euro would be free, and digital ruble payments are free for individuals; stablecoin transfers carry network fees.
• Who sees your payments? That depends on the design, from cash-like offline privacy to fully public blockchains.