Stablecoin vs CBDC
Stablecoin and CBDC are easy to mix up. Here are both definitions from the HighRisk Media glossary side by side.
Comparison table
| Term | Stablecoin | CBDC |
|---|---|---|
| Full name | — | Central Bank Digital Currency |
| In short | A stablecoin is a crypto asset whose price is pegged to a fiat currency (most often the US dollar) and maintained by reserves or an algorithm. | A digital form of national currency issued by a central bank as a direct liability to the holder. Used in retail and interbank settlements. |
| Verticals | Crypto, Fintech | Fintech, Crypto |
What is Stablecoin?
A stablecoin is designed as a "digital dollar" within a blockchain. Its purpose is to hold a stable value, so it can be used to transfer money, store funds between trading operations, and settle payments without the volatility of regular cryptocurrencies.
What is CBDC?
A central bank issues a CBDC as an electronic equivalent of cash or commercial bank reserves. Unlike stablecoins, a CBDC has no private issuer carrying market risk: the central bank's liability is nominally equal to the amount in circulation.