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In principle, CBDCs can be used across nearly all transaction types—buying fuel, groceries, or booking trips—mirroring current cash or bank card transactions. All transactions are recorded on a centralized digital ledger, allowing for rapid processing—virtually instant payments. An important feature of CBDCs is that even individuals without bank accounts could potentially access and use digital currency, promoting financial inclusion.
Types of CBDCs
CBDCs can be broadly categorized into two main types:
1. Retail CBDCs
Designed for everyday consumers, retail CBDCs are accessible through digital wallets or accounts. These are intended to serve as a direct replacement or supplement to physical cash, enabling the general public to make payments easily.