CBDCs vs. Private Stablecoins

What you'll learn

• Two Visions of Digital Money
• China e-CNY: The Most-Deployed CBDC
• eNaira, Sand Dollar, e-Rupee: The Mixed Track Record
• The Digital Euro and BIS Project Agora
• The US Anti-Retail-CBDC Stance
• The Programmability Stakes

Key terms

CBDC (Central Bank Digital Currency)

Digital money issued directly by a central bank as a liability of the state, distinct from privately-issued stablecoins or commercial bank deposits. Can be wholesale (interbank) or retail (citizen-accessible).

e-CNY (Digital Yuan)

China's CBDC, developed by the People's Bank of China starting around 2014. Cumulative transaction volume reached approximately 1.8 trillion yuan (~$250B) by mid-2024 and continues to grow. Most advanced major-economy CBDC pilot.

eNaira

Nigerian CBDC launched October 25, 2021 by the Central Bank of Nigeria. Adoption has been disappointing — low single-digit percentages of population — even as Nigerian stablecoin (USDT, USDC) usage flourished.

Sand Dollar

The Bahamas' CBDC launched October 20, 2020, the first formal CBDC launched by any sovereign country. Modest absolute adoption but high relative to population given the Bahamas' small size.

Digital Rupee (e₹)

India's CBDC, with retail pilot launched December 1, 2022 (wholesale pilot November 2022). Reached over 1 million daily transactions in pilot zones by 2024-2025. Integrated with UPI QR codes for cross-rail payments.

Digital Euro

European Central Bank's proposed CBDC, in preparation phase since November 2023. Designed as a public alternative to private payments with holding limits to prevent bank disintermediation. Possible launch decision 2025-2026; politically contested.

Project Agora

BIS-led multi-CBDC settlement experiment launched April 2024 involving central banks of France, Japan, South Korea, Mexico, Switzerland, the UK, and the New York Fed plus private partners. Explores cross-border wholesale CBDC settlement. Notably excludes China and Russia.

mBridge

Multi-CBDC bridge project involving China, Hong Kong, Thailand, and UAE central banks. BIS stepped back from mBridge in late 2024 amid geopolitical considerations. Represents the China-aligned wing of CBDC cross-border infrastructure.

Executive Order 14178

Signed by President Trump on January 23, 2025, "Strengthening American Leadership in Digital Financial Technology" — explicitly prohibits establishment, issuance, or promotion of a US CBDC, dissolved the Biden-era digital asset working group, and codified US preference for private regulated stablecoins.

Programmability

The capacity for digital money to have rules embedded in or attached to specific units — expiry, category restrictions, automatic tax deduction, conditional spending, address-level freezes. Far more powerful for state CBDCs than for private stablecoins; absent from Bitcoin entirely.