Part 2/10:
A Central Bank Digital Currency is essentially a digital version of a country's fiat money—government-backed currency like the dollar or the euro. Unlike cryptocurrencies such as Bitcoin, CBDCs are issued and regulated directly by the nation's central bank, making them a digital extension of existing fiat currencies.
What sets CBDCs apart is that they are firmly tied to national currencies. They are designed to function as legal tender, meaning they can be used to purchase goods, services, or even for travel—just like traditional cash or bank deposits. Unlike digital assets that are mined or issued by private entities, CBDCs are directly issued by the government, ensuring stability and trust.