The Atlantic Council's CBDC tracker currently lists 134 countries — representing 98 percent of global GDP — at some stage of developing a central bank digital currency. Three have fully launched. Nineteen are in pilot. The rest are researching, developing, or running proofs of concept. If you read the press releases from any of these central banks, the language is strikingly uniform: financial inclusion, payment efficiency, modernisation of monetary infrastructure, reduced reliance on private intermediaries.
That last phrase deserves attention. CBDCs are being designed, by the institutions that currently occupy the intermediary role, to reduce reliance on private intermediaries. The entity designing the infrastructure for disintermediation is the most powerful intermediary in the financial system. The result is not disintermediation. It is a state-controlled replacement for private intermediation — one that preserves every feature of the existing trust architecture except the private profit motive, and adds programmable surveillance on top.
Meanwhile, USDC processed over $12 trillion in transaction volume in 2024. Tether's USDT is now used as the de facto dollar in dozens of countries where the banking system is unreliable or the local currency is collapsing. The private stablecoin market has built, without central bank mandates or government backing, a functional global dollar payment rail that operates 24 hours a day, settles in seconds, and has proven more resilient in practice than the SWIFT-based correspondent banking network it is steadily replacing.
The comparison between CBDCs and stablecoins is not primarily a technical one. It is a question about what kind of trust infrastructure society is willing to build, and who it serves.
What a CBDC Actually Is
The term "central bank digital currency" covers a range of designs, and the differences matter enormously. A wholesale CBDC — used only by financial institutions settling transactions with each other at the central bank level — is essentially an upgrade to existing interbank settlement infrastructure. Several central banks, including the Bank of England and the ECB through its wholesale pilot programmes, are exploring this version. It is, at its core, a more efficient version of central bank reserves. Useful, but not transformative for ordinary users, and not what most CBDC coverage is about.
The retail CBDC — a direct claim on the central bank held by individuals and businesses — is where the more significant implications lie, and where most public attention is focused. China's e-CNY is the most advanced retail CBDC currently operating at scale. Nigeria's eNaira launched in 2021 and has struggled badly with adoption. The Eastern Caribbean's DCash has operated since 2021 across several island economies. The Bahamas' Sand Dollar predates all of them, having launched in 2020.
The key structural feature of a retail CBDC is that it creates a direct monetary relationship between the central bank and every citizen and business that holds it. This is presented as an advantage — bypassing the commercial banking system, reducing costs, extending financial access. In practice, it also means the central bank — or the government that controls it — has a complete, real-time record of every transaction conducted in the currency. The programmability that makes digital money technically attractive is the same feature that makes government-controlled digital money politically concerning.
The Programmability Problem
Programmable money is one of the genuinely interesting capabilities that blockchain technology makes possible. A stablecoin or tokenised asset can carry logic — conditions under which it can be transferred, restrictions on use, automatic execution of payment obligations when predefined conditions are met. In the context of financial infrastructure, this is useful: smart contracts can automate settlement, enforce collateral agreements, and execute complex multi-leg transactions without manual intervention at each step.
The same programmability in the context of state-issued digital currency is a different matter. China's e-CNY has been issued with expiration dates — funds that must be spent within a defined period, used in specific trials to stimulate consumer spending. Senior Chinese officials have discussed the possibility of geographic restrictions on where e-CNY can be spent. Both of these capabilities are technically trivial to implement in programmable money. Neither is possible with physical cash, which is precisely why physical cash retains legal tender status in every jurisdiction and why its gradual displacement by digital payments — CBDCs or otherwise — represents a structural shift in civil liberties that moves much faster than the public conversation about it.
European and American CBDC proposals have included design commitments to privacy — the ECB's digital euro design incorporates offline payment capability and privacy protections that the Chinese system lacks. The Federal Reserve has repeatedly stated that a US CBDC would require Congressional authorization and would not be an anonymous surveillance tool. These commitments are genuine constraints in democratic contexts, and they matter. They do not change the underlying architecture: a retail CBDC is, structurally, a ledger maintained by or under the authority of the state, and the privacy properties of that ledger depend entirely on political choices that can be reversed.
Where Stablecoins Actually Stand
The contrast with private stablecoins is instructive, not because private stablecoins are without problems — they have significant ones — but because the problems are different in kind.
Tether, the issuer of USDT, has had a troubled relationship with transparency. For years, questions about the composition of its reserves went unanswered or were answered with auditor attestations rather than full audits. The 2021 CFTC settlement, in which Tether paid $41 million and admitted that USDT had not always been fully backed by dollar reserves as claimed, confirmed that the concerns were not baseless. Tether is not a model of the financial transparency that blockchain advocates claim the technology enables. It is a private company with commercial incentives and a history of opacity, operating at enormous scale in a regulatory environment that has only recently begun to catch up.
USDC, issued by Circle, is the cleaner story. Circle publishes monthly reserve attestations from Grant Thornton, maintains a reserve composition that is overwhelmingly short-duration US Treasuries and cash, and has consistently sought regulatory engagement rather than regulatory avoidance. The brief USDC depeg in March 2023 — when Circle disclosed $3.3 billion in reserves held at Silicon Valley Bank — demonstrated that the reserves are real and that Circle's risk management had a blind spot, not that the system was fraudulent. USDC recovered its peg within days as the FDIC backstopped SVB deposits.
The stablecoin risks are real: reserve quality, issuer solvency, regulatory uncertainty, and the concentration of systemic importance in two private companies that are not banks and do not have access to the Fed's lender-of-last-resort facility. None of these are arguments for CBDCs specifically. They are arguments for stablecoin regulation — reserve requirements, audit standards, capital requirements, orderly wind-down frameworks. The Lummis-Gillibrand Payment Stablecoin Act and the EU's MiCA framework are both, in their different ways, attempts to build that regulatory wrapper around private stablecoins without replacing them with state-issued alternatives.
The US Has Made a Choice, for Now
In March 2025, President Trump signed an executive order explicitly prohibiting the Federal Reserve from developing or issuing a retail CBDC, citing privacy concerns and the risk of government surveillance of financial transactions. The order does not bind Congress permanently and could be reversed by a future administration. But it does reflect a genuine political consensus in the current US environment: that the risks of state-controlled programmable money outweigh the efficiency gains, and that the private stablecoin market — properly regulated — is a better path for dollar digitisation.
This is a defensible position on the merits. The dollar's status as the global reserve currency means that a US retail CBDC would not just be a domestic payment tool — it would be a global surveillance instrument operated by the US government at a moment when dollar hegemony is already a source of geopolitical friction. The stablecoin alternative achieves most of the technical goals — digital dollar liquidity, programmable settlement, 24/7 availability, global access — without the political costs.
The EU's trajectory is different. The ECB's digital euro project has moved through multiple design phases and is now in a preparation phase ahead of a potential decision to proceed with issuance. The design emphasises privacy protections and positions the digital euro as a complement to existing bank deposits rather than a replacement. Adoption will be voluntary, at least initially. Whether the complement framing survives the inevitable pressure to improve adoption rates — once a government has built something, the incentive to make it used is strong — remains to be seen.
What the Competition Reveals
The CBDC-versus-stablecoin debate is ultimately a competition between two visions of what digital money is for. One vision holds that money is a public utility that should be operated by public institutions, with privacy and access defined by law and subject to democratic accountability. The other holds that money is a protocol — an infrastructure layer that functions best when it is open, permissionless, and not controlled by any single issuer, public or private.
Neither vision is pure in practice. Stablecoins are issued by private companies with their own interests and failure modes. CBDCs designed with genuine privacy protections are meaningfully better than the Chinese model that most critics invoke. The question is not which design is theoretically ideal but which is more likely to deliver the actual outcome — efficient, accessible, reliable digital money — given the institutional incentives at play.
The institutions designing CBDCs are the same institutions that produced T+2 equity settlement, correspondent banking with its 3-5 day cross-border transfer times, and a mortgage market that required a global financial crisis to expose its structural failures. The track record is not reassuring. Stablecoins have moved $12 trillion in a single year on infrastructure built in less than a decade. That gap in execution is not an accident. It is what happens when the intermediaries are not designing the system.
If regulated stablecoins establish themselves as the dominant global digital dollar infrastructure before any major central bank successfully deploys a retail CBDC at scale, the question of whether governments will be able to reclaim that infrastructure becomes genuinely uncertain. The window in which CBDCs could displace private stablecoins may already be closing — not because stablecoins are perfect, but because they are already there.