What is a CBDC?

A CBDC is a digital form of central bank money alongside cash and the reserve balances that banks hold at central banks. Money in a commercial bank account is a claim on that bank, so the issuer differs even when the currency is the same.

In a wholesale model, eligible financial institutions hold central bank money for settlement between themselves. A retail model makes a direct central bank claim available to individuals and businesses for everyday payments. The BIS analysis of CBDC system design treats privacy, offline payments and cybersecurity as design choices that require explicit policy and technical decisions.

A wholesale CBDC is for payments between financial institutions, and a retail CBDC is for payments by people and companies. The SNB compares the two as follows (SNB, CBDC):

Wholesale CBDC can support conditional payments, as described by the BIS: a payment settles only if set conditions are met, which goes further than delivery versus payment in the current RTGS systems.

The CBDC examples in Europe are the proposed digital euro, the wholesale work of the Eurosystem and the Swiss Helvetia pilot.

• Digital euro: a retail CBDC for the euro area. A pilot is planned for 2027, and a potential first issuance during 2029 depends on the necessary EU legislation. Details in What is the digital euro?
• Pontes: the solution of the Eurosystem that links market DLT platforms to TARGET Services. Participants settle with cash tokens on a Eurosystem DLT platform or in T2. The ECB launched it on 21 September 2026 (ECB, Pontes). A second track, Appia, studies a long-term tokenized system.
• Project Helvetia: since the end of 2023 the SNB issues wholesale CBDC in Swiss francs on the SIX Digital Asset Platform. The pilot runs until at least June 2028 (SNB, Project Helvetia).

A CBDC is not a cryptocurrency, and whether it is legal tender depends on the law of each country. The SNB describes cryptocurrencies as issued on a decentralized basis, not pegged to a national currency and very volatile in value. A CBDC is issued by the central bank in the national unit of account.

The legal tender status of a CBDC depends on the applicable national legislation. For the digital euro, Article 7 of the Commission proposal would grant it. The wholesale CBDC in the Helvetia pilot is, according to the SNB, "in both economic and legal terms" a representation of sight deposits at the SNB in a technically different form.

In Germany and Austria, a retail CBDC would be the digital euro, issued by the Eurosystem with the Deutsche Bundesbank and the Oesterreichische Nationalbank. It needs an EU regulation first; the proposal is in negotiation. For wholesale settlement, eligible banks in both countries can use Pontes. The Eurosystem site of the BIS Innovation Hub opened in March 2023 with offices in Frankfurt and Paris, hosted by the Deutsche Bundesbank and the Banque de France, and wholesale CBDC is one of its focus areas (BIS Innovation Hub). The Deutsche Bundesbank, whose Central Office is in Frankfurt, built the Trigger Solution, one of three solutions the Eurosystem tested from May to November 2024 for settling DLT transactions in central bank money. A total of 25 institutions explored this solution during the trials (Bundesbank, Trigger Solution).

In Switzerland the SNB sees no case for a retail digital franc at present and runs the wholesale pilot Helvetia. Eligible banks include UBS, Raiffeisen Switzerland, Zürcher Kantonalbank and Commerzbank. To take part, a bank needs a sight deposit account at the SNB and admission to the SIC system.