Central Bank Digital Identity

Central bank digital identity is a loosely used phrase rather than a standard term, and it has no single agreed definition. It usually appears in discussions of how people and firms would be identified when using money issued or run by a central bank, especially a central bank digital currency. Most published CBDC designs do not have the central bank verify individual users itself. Instead, banks and payment providers act as intermediaries and carry out know-your-customer checks, often with lighter, tiered checks for low-value wallets, while the central bank sees limited or pseudonymised data. Some central banks also help build national payment and identity infrastructure, and the phrase is sometimes applied to that work. Questions of privacy, data access and financial inclusion are central to the debate. Also see digital identity and CBDCs compared with stablecoins.