🪙 CBDCs & Bank-Issued Stablecoins

Central Bank Digital Currencies (CBDCs) and bank-issued stablecoins represent the next evolution of money for financial institutions. They combine the stability of fiat currencies with the efficiency and programmability of digital assets, enabling banks to streamline operations, reduce costs, and offer new services to clients.

This page explores what CBDCs and bank-issued stablecoins are, their benefits, and how banks can leverage them in practice.

What Are CBDCs?

CBDCs are digital versions of a country’s fiat currency, issued and regulated by the central bank. They are legal tender and can be used for retail or wholesale transactions depending on the design.

Key Features

• Stable Value – Pegged 1:1 to the national currency
• Centralised Issuance – Managed and backed by the central bank
• Programmable Capabilities – Supports conditional payments, automated compliance, or transaction limits
• Transparency & Auditability – Real-time monitoring for regulatory compliance

Benefits for Banks

• Faster settlement and clearing
• Reduced operational costs for transfers
• Simplified cross-border payments and liquidity management
• Improved transparency and reporting for compliance purposes

Bank-Issued Stablecoins

Private banks or banking consortia can issue stablecoins backed by their reserves, often used for internal settlements or partner network payments. Unlike CBDCs, these are not issued by central banks but can still provide a secure, regulated digital money solution.

Use Cases

• Interbank Settlements – Instant transfers within a banking consortium
• Corporate Treasury – Streamlined liquidity and cross-border payments
• Retail Payments – Digital wallets or loyalty programs
• Programmable Finance – Smart contracts for conditional payments

Advantages

• Reduced reliance on legacy payment systems
• Real-time reconciliation and lower operational risk
• Customisable business logic for payments and settlements
• Enhanced auditability for regulators and internal reporting

Implementation Options

Banks can adopt CBDCs or issue stablecoins using various approaches:

1. Direct Integration – Accessing central bank networks or issuing on regulated ledgers
2. Consortium Models – Working with other banks or fintech partners in a shared network
3. Platform Providers – Leveraging APIs and infrastructure for issuance, custody, and compliance

Each approach can be tailored depending on the bank’s operational model, regulatory requirements, and target use cases.

Regulatory Considerations

• Compliance with AML/KYC regulations
• Reporting standards for central banks
• Consumer protection for retail-facing stablecoins
• Cross-border regulations for international transfers

Banks must carefully navigate regulations while designing CBDC or stablecoin solutions to ensure legal compliance and operational security.

Key Takeaways

• CBDCs and bank-issued stablecoins provide stable, programmable digital money for modern banking.
• CBDCs are issued by central banks; bank-issued stablecoins are managed by private institutions.
• Use cases include faster payments, treasury management, interbank settlements, and programmable finance.
• Banks should evaluate implementation options and regulatory requirements before adoption.

Learn More / Next Steps

• Main Page: Stablecoins for Banks →
• Private & Consortium Bank Stablecoins →
• Integration & Developer Guide →