SuperEx Education Series: Central Bank Digital Currencies (CBDCs) and Their Relationship with the Crypto World

United States: From Skepticism to Planning a "Digital Dollar"

The United States has maintained an ambivalent stance on CBDCs. The Federal Reserve has largely operated in a "technical observation mode," while private "dollar substitutes" like USDT and USDC have gained prominence in on-chain payments globally. This situation presents the Fed with a dilemma: failing to act could lead to the dollar's international digital status being usurped by private stablecoins, whereas a premature launch of a CBDC could spark social controversies regarding financial privacy and state power limitations.

The introduction of FedNow, a real-time payment system launched in 2023, serves as a prototype infrastructure for a potential future digital dollar. It provides the U.S. banking system with 24/7 settlement capabilities and establishes a technical foundation. Concurrently, initiatives like the Digital Dollar Project, advocating for a public-private partnership, are being discussed in Congress. The U.S. strategy appears to be one of allowing private stablecoins to mature while preparing for a government-backed CBDC to follow.

China: A Global Frontrunner and a Working Template

China's digital yuan (e-CNY) is among the pioneering CBDC pilots, with large-scale tests conducted in cities like Shenzhen, Suzhou, and Chengdu since 2019. The e-CNY operates on a two-tier architecture, distinct from decentralized blockchain systems. This model features a central bank layer for issuance and ledger management, and a commercial bank layer for user onboarding and circulation. This structure aims to balance state control with market efficiency. While not fully anonymous, it allows for "controllable anonymity," where privacy is protected, but regulatory oversight can be applied.

The e-CNY's strategic objective extends beyond merely competing with existing payment platforms like Alipay; it seeks to facilitate RMB internationalization. By integrating with cross-border systems such as mBridge and Swift, the e-CNY could establish a new standard for cross-border clearing and reduce reliance on dollar settlements, positioning China's CBDC as a blend of "sovereign fintech" and "monetary diplomacy."

Europe: From a "Digital Euro" to a Tool Against Dollarization

Europe has progressed steadily towards a digital euro, entering a prototyping phase in 2023. The design prioritizes financial sovereignty, aiming to prevent the penetration of dollar stablecoins within the euro area and maintain oversight of payment systems. The digital euro also employs a two-tier model, where users maintain accounts with commercial banks, but settlement is managed by the European Central Bank (ECB). Technical emphasis is placed on privacy and offline payment capabilities, striving for "trustworthy yet controllable e-cash." The system may eventually integrate with SEPA to enable instant cross-border euro transfers.

Southeast Asia and Emerging Markets: Testbeds and Opportunity Zones

In Southeast Asia, Africa, and Latin America, CBDC initiatives are often driven by pragmatic needs, addressing gaps in financial infrastructure and aiming for financial inclusion for the approximately 2 billion unbanked individuals globally. These regions see CBDCs as a way to bypass traditional banking systems. Examples include Nigeria's eNaira, focused on financial inclusion but facing adoption challenges; the Bahamas' Sand Dollar, the world's first officially issued CBDC designed for island economies; Cambodia's Bakong, built on a blockchain base by Japan's Soramitsu; and Thailand and Hong Kong's mBridge project, aimed at regional CBDC interoperability. While these regions are technically innovative, public trust and user habits remain significant barriers to adoption.

Two Trust Mechanisms — Opposed, Yet Converging

The fundamental principle behind cryptocurrency, as articulated in Bitcoin's whitepaper, was to establish a "purely peer-to-peer electronic cash system" independent of centralized authorities. Trust in this system is derived from mathematical principles, code, and consensus mechanisms, rather than governmental or banking institutions. CBDCs, conversely, represent the state's redefinition of trust. They aim to enhance regulation and payment efficiency by leveraging blockchain-era technologies, rather than dismantling the existing financial order. In this context, while algorithms are employed, they serve sovereign credit and macroeconomic policy objectives. If Bitcoin is viewed as a "technical revolt," then CBDC can be considered the sovereign system's digital counter-response, each addressing the question of how money should be trusted in the 21st century from different ideological standpoints—one prioritizing freedom, the other order.

Decentralization vs. Limited Centralization

Cryptocurrencies advocate for "no intermediaries," with transactions validated on-chain to promote efficiency and provide a shared, trust-minimized ledger for global users. CBDCs, on the other hand, implement "limited centralization." They typically do not allow universal validation but utilize permissioned blockchains where nodes are controlled by central banks and designated financial institutions. This approach preserves transparency and immutability while maintaining absolute state control over issuance and circulation. Central banks often emphasize a "tech-neutral, policy-first" approach, adopting distributed architectures while keeping sovereign credit at the core.

Two Paths: Rebellion and Absorption

Historically, cryptocurrency emerged as a challenge to the existing monetary system, rejecting inflation, censorship, and intermediaries. As the crypto economy expanded and intersected with global financial realities, nation-states began to recognize its significance as an unavoidable financial laboratory. Consequently, CBDCs can be interpreted not merely as regulatory measures but as absorptive responses to crypto innovation. Cryptocurrencies introduced programmable finance, leading CBDCs to incorporate policy tools with smart-contract functionalities. The efficiency gains in cross-border clearing by crypto spurred exploration of standards like mBridge and Project Dunbar. The demand for fiat digitization driven by stablecoins prompted CBDCs to re-establish the trust framework as the official digital currency. In this light, CBDCs are not seen as crypto's adversary but rather as its institutional successor.

An Enduring Balance: Control and Freedom

At a macroeconomic level, CBDCs and cryptocurrencies exist in a symbiotic relationship, reflecting a balance between "algorithmic freedom" and "state order." While one idealizes decentralization, the other prioritizes governance efficiency. However, freedom and order are not mutually exclusive but rather interconnected forces driving towards a more efficient, transparent, and inclusive global monetary network. The future is likely to feature a hybrid reality where CBDCs operate within national payment systems for macroeconomic stability, while cryptocurrencies continue to foster open-market innovation in asset-based, composable finance. The distinction between these systems may blur as governments adopt on-chain governance concepts and decentralized finance (DeFi) protocols introduce compliant "central bank liquidity channels." As this mutual integration progresses, the "crypto vs. CBDC" dichotomy may fade, giving way to a hybrid monetary order where algorithms and sovereignty coexist.