CBDC Survey 2025 | Central Bank Digital Currencies Guide

Understanding Central Bank Digital Currencies in 2025

The global financial landscape is undergoing a fundamental transformation as central banks worldwide accelerate their exploration of Central Bank Digital Currencies (CBDCs). Born from the intersection of financial innovation and sovereign monetary policy, CBDCs represent a new paradigm in how nations conceptualize, issue, and manage their currencies in an increasingly digital world. This comprehensive survey, analyzing 135 research papers published between 2018 and 2025, provides the most thorough examination of CBDC design taxonomy and ecosystem frameworks available today.

The concept of CBDCs emerged against the backdrop of the 2008 financial crisis, which eroded public confidence in centralized financial institutions and gave rise to decentralized alternatives like Bitcoin. As private digital currencies gained traction, governments recognized the urgent need to safeguard public monetary sovereignty. The Bank for International Settlements (BIS) defines a CBDC as a new form of digital currency denominated in national currency units and directly issued by the central bank, fundamentally distinct from both commercial bank deposits and private cryptocurrencies.

Unlike cryptocurrencies, whose monetary policies are embedded in blockchain protocols and characterized by high price volatility, CBDCs are centrally regulated while potentially leveraging distributed technologies for enhanced efficiency. They can be stored in digital wallets without requiring traditional banking relationships, enabling financial inclusion for unbanked populations. According to the BIS 2023 survey, approximately 94% of responding central banks are actively engaged in CBDC research, with 81% developing proofs of concept and 33% having launched pilot projects.

CBDC Design Taxonomy and the Design Pyramid

The fundamental architecture of any CBDC system can be understood through what researchers call the CBDC Design Pyramid — a hierarchical framework organizing design decisions across four core dimensions. At the foundation lies the system architecture (direct, indirect, or hybrid), which cascades upward through ledger technology selection, access model determination, and finally the application domain specification. Each layer constrains and influences the choices available at subsequent levels.

The design pyramid, refined through analysis of dozens of implemented and proposed systems, reveals that CBDC architecture is far more nuanced than simple technology selection. It encompasses considerations ranging from the central bank’s operational involvement in transaction processing to the role of commercial intermediaries in user-facing services. The taxonomy extends beyond the four core dimensions to include consensus algorithms, programmability features, onboarding mechanisms, and spatial coverage requirements.

This structured approach to CBDC design is essential because no single configuration suits all jurisdictions. A developing nation prioritizing financial inclusion may opt for a direct architecture with offline payment capabilities, while an advanced economy focused on wholesale settlement efficiency might choose a hybrid model with sophisticated DLT infrastructure. The design pyramid provides a systematic framework for evaluating these trade-offs, ensuring that technical choices align with policy objectives. Researchers have particularly noted the growing importance of programmability — the ability to embed conditional logic into CBDC transactions — as a differentiating feature with significant implications for monetary policy implementation.

System Architecture Models for Digital Currency

The choice of system architecture fundamentally shapes how a CBDC operates, determining processing efficiency, security characteristics, and impact on existing financial systems. Three primary architectural models have emerged from global experimentation: the direct model, where the central bank manages all transactions and maintains user accounts; the indirect model, relying on commercial intermediaries to handle user-facing operations; and the hybrid model, which combines elements of both approaches to balance control with scalability.

In a direct CBDC architecture, the central bank assumes full responsibility for account management, transaction processing, and record-keeping. While this approach provides maximum control over monetary policy transmission and eliminates counterparty risk, it places enormous operational burden on the central bank and raises concerns about single points of failure. The Bahamas’ Sand Dollar initially explored this model, though practical experience has led many implementations toward hybrid alternatives.

The indirect model, also known as the two-tier architecture, delegates customer-facing operations to licensed intermediaries while the central bank maintains oversight through a wholesale settlement layer. This approach leverages existing banking infrastructure and expertise in customer service, KYC compliance, and dispute resolution. Analysis of 26 existing CBDC projects in this survey confirms that the two-tier architecture is the most widely adopted configuration, reflecting central banks’ preference for maintaining monetary sovereignty without disrupting established financial intermediation.

Hybrid architectures attempt to capture the benefits of both models by allowing the central bank to maintain a direct claim on user balances while outsourcing transaction processing to intermediaries. China’s Digital Currency Electronic Payment (DC/EP) system, commonly known as the e-CNY, exemplifies this hybrid approach, enabling participation from commercial banks, fintech companies, and telecom operators while the People’s Bank of China retains ultimate control over issuance and monetary policy.

Distributed Ledger Technology in CBDC Systems

The selection between distributed ledger technology (DLT) and centralized ledger technology (CLT) represents one of the most consequential technical decisions in CBDC design. DLT, which underpins most blockchain systems, offers inherent advantages in resilience, transparency, and tamper resistance. However, it introduces complexities in transaction throughput, latency, and energy consumption that must be carefully evaluated against centralized alternatives.

Among the 26 CBDC projects analyzed in this survey, DLT-based implementations significantly outnumber centralized approaches. This preference reflects the technology’s natural alignment with CBDC requirements: distributed validation eliminates single points of failure, cryptographic hashing ensures transaction integrity, and the append-only nature of distributed ledgers provides a robust audit trail. Permissioned DLT variants — where participation is restricted to approved nodes rather than open to the public — have emerged as the predominant choice, offering the security benefits of distribution while maintaining the performance and privacy controls central banks require.

Notable DLT platforms deployed in CBDC experimentation include Hyperledger Fabric, R3’s Corda, and custom-built distributed systems. Each platform presents distinct trade-offs in terms of smart contract capabilities, consensus flexibility, and interoperability. The European Central Bank’s digital euro prototyping phase evaluated multiple DLT platforms alongside centralized alternatives, ultimately determining that the technology choice should be driven by specific performance requirements rather than ideological preference for decentralization.

Centralized ledger technology remains a viable option, particularly for jurisdictions prioritizing transaction speed and simplicity. Sweden’s e-Krona project initially tested both DLT and CLT approaches, finding that centralized systems offered superior throughput for domestic retail payments while DLT provided advantages for cross-border settlement scenarios. This dual-track evaluation approach is increasingly recommended by researchers as a best practice for CBDC development.

Consensus Mechanisms and Performance Trade-offs

For DLT-based CBDC systems, the consensus mechanism — the protocol by which network participants agree on the validity and ordering of transactions — directly determines system performance, security guarantees, and fault tolerance. Unlike public blockchain systems that rely on energy-intensive proof-of-work or capital-intensive proof-of-stake mechanisms, CBDC networks operate in permissioned environments where participants are known and trusted to varying degrees.

Practical Byzantine Fault Tolerance (PBFT) and its variants have emerged as leading consensus choices for CBDC implementations. PBFT provides deterministic finality — meaning transactions are confirmed with certainty rather than probabilistically — which is essential for financial settlement. However, PBFT’s communication complexity scales quadratically with the number of nodes, creating practical upper limits on network size. For CBDC systems with a limited number of validator nodes (typically central bank plus licensed intermediaries), this trade-off is acceptable.

Raft consensus, offering crash fault tolerance without Byzantine fault tolerance, provides higher throughput in environments where all participants are trusted. Several CBDC pilot projects have adopted Raft for internal settlement layers where the risk of malicious behavior is negligible, reserving more robust consensus mechanisms for external-facing transaction layers. The research surveyed reveals an emerging trend toward hybrid consensus approaches that apply different mechanisms to different transaction types based on risk profiles.

Performance benchmarking across CBDC prototypes consistently identifies the trilemma between throughput, latency, and decentralization. China’s e-CNY system reportedly achieves over 300,000 transactions per second in laboratory conditions, while most DLT-based prototypes demonstrate throughput in the range of 1,000 to 10,000 TPS — sufficient for current retail payment volumes but potentially inadequate for future growth scenarios that include programmable money and machine-to-machine micropayments.

Access Models and Digital Wallet Integration

The access model determines how users identify themselves and interact with the CBDC system, with profound implications for privacy, inclusion, and regulatory compliance. Two primary approaches have crystallized: account-based access, where transactions are authorized through identity verification linked to user accounts, and token-based access, where possession of a cryptographic token serves as proof of ownership, analogous to physical cash.

Token-based CBDCs more closely replicate the anonymity characteristics of physical cash, allowing peer-to-peer transfers without intermediary involvement. This model is particularly attractive for financial inclusion initiatives in regions where many citizens lack formal identification documents. The survey’s analysis of 26 CBDC projects reveals token-based access as the most frequently adopted model, reflecting central banks’ desire to provide a digital equivalent of cash.

Digital wallet integration represents the critical user-facing layer of any CBDC system. Wallets must balance security (protecting private keys and transaction credentials), usability (enabling seamless payment experiences comparable to existing mobile payment solutions), and interoperability (functioning across devices, platforms, and potentially across borders). Hardware wallets with secure enclaves are being explored for high-security applications, while software wallets integrated into existing banking and fintech applications offer the fastest path to user adoption.

The challenge of offline payments — enabling CBDC transactions without internet connectivity — has emerged as a critical research frontier. For CBDCs to truly serve as digital cash, they must function in scenarios where network access is unavailable, such as remote areas, natural disasters, or infrastructure failures. Solutions under investigation include pre-loaded value tokens stored in secure hardware elements, local mesh networking protocols, and deferred settlement mechanisms that reconcile offline transactions when connectivity is restored.

Cross-Border CBDC Payments and Interoperability

Perhaps the most transformative potential of CBDCs lies in their ability to revolutionize cross-border payments — currently one of the most inefficient segments of the global financial system. Traditional international transfers rely on correspondent banking networks that are slow (2-5 business days), expensive (fees averaging 6.2% for remittances), opaque (limited tracking), and operationally complex. CBDCs offer a path to near-instant, low-cost international settlement through direct central bank-to-central bank corridors.

Project mBridge, a collaboration between the BIS Innovation Hub and the central banks of China, Hong Kong, Thailand, and the United Arab Emirates, represents the most advanced multi-CBDC platform for cross-border payments. The platform enables participating central banks to issue and exchange CBDCs on a shared distributed ledger, eliminating the need for correspondent banks and achieving settlement in seconds rather than days. Early results demonstrate cost reductions of up to 50% compared to existing channels.

Interoperability between different CBDC systems presents both technical and governance challenges. Three primary models have been proposed: the compatible model (aligning technical standards across independently operated systems), the interlinked model (connecting separate CBDC systems through shared interfaces), and the single-system model (operating a unified multi-currency platform). Each model embodies different assumptions about sovereignty, trust, and technical complexity.

The survey identifies cross-border payments as the fastest-growing area of CBDC research, with recent publications increasingly focused on addressing the “last mile” challenges of currency conversion, regulatory harmonization, and dispute resolution in multi-jurisdictional transactions. The potential to reduce remittance costs — which disproportionately affect developing nations — provides a compelling economic justification for continued investment in cross-border CBDC infrastructure.

Global CBDC Projects Comparative Analysis

This survey provides the most comprehensive comparative analysis of 26 CBDC projects to date, evaluating each across four dimensions: system architecture, ledger technology, access model, and application domain. The analysis reveals both convergent trends and significant divergence in design choices, reflecting the diversity of policy objectives and technical capabilities across jurisdictions.

Among the projects analyzed, the two-tier (indirect) architecture combined with DLT and token-based access emerges as the most common configuration. However, the survey notes that no dominant trend has materialized in application domain selection — roughly equal numbers of projects focus on retail, wholesale, and dual-purpose applications. This equilibrium suggests that central banks are still evaluating the relative merits of different deployment strategies.

China’s e-CNY stands out as the largest-scale pilot, with transactions processed in dozens of cities and integration with major commercial platforms. The Bahamas’ Sand Dollar and Nigeria’s eNaira represent pioneering full-launch implementations in smaller economies, providing valuable lessons about user adoption challenges and the importance of merchant acceptance networks. In Europe, the European Central Bank’s digital euro investigation phase is among the most methodical, with extensive public consultation and multi-platform prototyping.

The survey highlights several emerging patterns: (1) advanced economies tend to prioritize wholesale applications and payment system modernization, while developing nations focus on retail financial inclusion; (2) DLT adoption is nearly universal for cross-border projects but mixed for domestic-only systems; (3) privacy-by-design approaches are increasingly adopted in response to public concerns; and (4) programmability features are becoming a standard consideration rather than an experimental addition.

Notable projects also include Sweden’s e-Krona (testing both CLT and DLT architectures), India’s Digital Rupee (phased rollout targeting both retail and wholesale segments), and Brazil’s Drex (focusing on tokenized asset settlement). Each project contributes unique insights to the global understanding of CBDC implementation best practices, and their collective experience forms the empirical foundation for the design recommendations presented in this survey.

Privacy, Security, and Offline Payment Challenges

The tension between privacy and regulatory compliance represents the most debated aspect of CBDC design. Central banks face a fundamental challenge: providing the transaction privacy that users expect from cash-like instruments while maintaining the ability to detect and prevent financial crimes including money laundering, terrorism financing, and tax evasion. Nine percent of the research papers analyzed in this survey specifically address this dual challenge.

Tiered privacy models have emerged as the leading approach to this dilemma. Under such frameworks, small-value transactions below a defined threshold can be executed with minimal or no identity verification, preserving cash-like anonymity for everyday purchases. Larger transactions trigger progressively stricter identity requirements, ensuring regulatory visibility where the risk of illicit activity is greater. The challenge lies in calibrating these thresholds to balance user convenience with enforcement effectiveness.

Advanced cryptographic techniques offer technological solutions to the privacy challenge. Zero-knowledge proofs enable transaction validation without revealing underlying details, allowing regulatory nodes to confirm compliance without accessing specific amounts or counterparty identities. Homomorphic encryption enables computations on encrypted data, potentially allowing central banks to perform aggregate analysis for monetary policy purposes without accessing individual transaction records.

Security considerations extend beyond privacy to encompass the resilience of CBDC infrastructure against cyberattacks, quantum computing threats, and operational failures. As sovereign monetary systems, CBDCs must achieve security standards exceeding those of commercial payment platforms. The survey identifies post-quantum cryptography migration, secure multi-party computation, and hardware security modules as critical research areas for ensuring long-term CBDC system integrity. Offline payment security presents unique challenges, as transactions completed without network verification must be protected against double-spending through hardware-based controls and deferred settlement protocols.

Future Research Directions for CBDC Implementation

As CBDC development transitions from experimental prototyping to production deployment, several critical research directions demand attention. This survey identifies forward-looking recommendations that address both the technical evolution of CBDC systems and their broader integration with the changing financial landscape.

First, the convergence of CBDCs with tokenized assets and decentralized finance (DeFi) protocols presents opportunities for programmable monetary policy instruments that can automatically adjust interest rates, implement targeted fiscal transfers, or enforce compliance rules through smart contracts. Research is needed to understand the implications of programmable money for monetary sovereignty and financial stability.

Second, the environmental impact of CBDC infrastructure — while significantly lower than proof-of-work cryptocurrencies — requires systematic assessment as systems scale from pilot to production. Energy-efficient consensus mechanisms and sustainable infrastructure design should be core considerations in next-generation CBDC architectures.

Third, the human factors of CBDC adoption deserve greater research attention. Technical excellence alone does not guarantee user adoption, as demonstrated by the challenges faced by early CBDC launches in Nigeria and the Bahamas. Understanding user behavior, building trust, designing intuitive interfaces, and ensuring accessibility for elderly and disabled populations are essential for achieving the financial inclusion objectives that motivate many CBDC programs.

Finally, the governance frameworks for multi-CBDC interoperability require innovative approaches that balance national sovereignty with the efficiency gains of coordinated international settlement. As projects like mBridge demonstrate the technical feasibility of cross-border CBDC transactions, the legal, regulatory, and diplomatic dimensions of shared monetary infrastructure become the binding constraints on progress. Future research must bridge the gap between technical architecture and institutional governance to realize the full potential of CBDCs in transforming global finance.