The Bahamas launched the Sand Dollar in 2020. Nigeria launched the eNaira in 2021. Jamaica launched JAM-DEX in 2022. These were isolated experiments, watched cautiously from a distance by central banks that were not yet ready to commit. By 2024, that caution had given way to urgency. By 2026, it had become a global movement. Twenty-four countries activated central bank digital currency programmes in 2026 alone, bringing the global total of active or pilot-stage CBDC jurisdictions to 68. The pace of rollout doubled in eighteen months. The coverage of that rollout, in the mainstream financial press and in public political debate, did not keep pace.

That gap between the scale of what is being built and the depth of public understanding about what it means is itself a significant fact. Central bank digital currencies are not simply a digital version of cash. They are a redesign of the fundamental relationship between the state, the financial system, and the individual. The implications of that redesign, for privacy, for financial inclusion, for monetary sovereignty, and for the balance of power between governments and citizens, deserve considerably more analytical attention than they have received.

A central bank digital currency is a digital liability of the central bank, issued directly to citizens or through commercial banks, denominated in the national unit of account. This distinguishes it from two things it superficially resembles. It is not cryptocurrency: it is issued and controlled by a central authority, its supply is determined by monetary policy, and it has no decentralised ledger or mining mechanism. It is also not the digital money that already exists in commercial bank accounts: existing digital bank deposits are liabilities of commercial banks, not of the central bank itself. A CBDC represents a direct claim on the state.

That directness is the source of both its appeal and its risk. The appeal is straightforward: a CBDC can reach unbanked populations who have no commercial bank account, it can reduce the cost of payments infrastructure, it can accelerate financial inclusion in countries where large portions of the population operate in cash, and it can give central banks a more direct instrument for monetary policy transmission. The risk is equally straightforward: a programmable digital currency issued and controlled by the state creates the technical possibility of a level of surveillance and control over individual financial behaviour that has no precedent in the history of money.

The programmability question is the one that most directly separates CBDC from previous forms of money. Cash is anonymous and unconditional: a banknote can be used to purchase anything that is legal, and the transaction leaves no record accessible to the state. A programmable CBDC need not be. The technical architecture of a CBDC can include expiry dates on funds, geographic restrictions on where money can be spent, categorical restrictions on what it can be spent on, and a complete transaction record accessible to the issuing authority. Whether these features are implemented is a policy choice. That the choice exists is a structural fact about the technology.

China's e-CNY is the most advanced large-economy CBDC in operation. It has been in development since 2014 and in pilot operation since 2019. By mid-2026, over 260 million digital wallets had been activated across 26 cities. The e-CNY is integrated with WeChat Pay and Alipay, China's dominant payment platforms. It has been distributed through government welfare payments, used in retail transactions, and tested for cross-border settlements through the mBridge platform.

What China's programme demonstrates is not primarily about financial inclusion or payments efficiency, though both are cited in official communications. What it demonstrates is the architecture of a system in which the state has visibility into transactions at a granularity that cash never permitted, and in which that visibility can be retained or expanded as a matter of policy rather than requiring any change to the underlying technology. The People's Bank of China has stated publicly that the e-CNY is designed with "controllable anonymity": anonymous to other users but not to the central bank.

That phrase, controllable anonymity, contains in two words the entire debate about CBDCs and civil liberties. The control sits with the state. The anonymity is granted and can be withdrawn. For citizens living under governments with strong rule-of-law traditions and independent judiciaries, this may represent a manageable risk. For citizens living under governments that have demonstrated willingness to use financial systems as instruments of political control, it is a considerably more serious matter.

The case most frequently made for CBDCs in developing country contexts is financial inclusion. Approximately 1.4 billion adults globally remain unbanked as of 2026, the majority in sub-Saharan Africa and South Asia. Mobile money platforms such as M-Pesa in Kenya have demonstrated that digital payments can reach populations that commercial banking has not. CBDCs, proponents argue, can extend this further: a state-backed digital wallet requires no commercial bank account, no credit history, and minimal documentation.

The argument has genuine force. In countries where the unbanked population is large and the mobile penetration is high, a well-designed CBDC retail system could meaningfully expand access to formal financial services, reduce transaction costs for remittances, and improve the efficiency of government benefit distribution. Several of the 19 African central banks currently developing CBDC programmes cite financial inclusion as the primary motivation.

The question is whether financial inclusion and financial surveillance are separable in the architecture being built, or whether they are, in some designs, the same infrastructure serving two purposes simultaneously. A system that can deliver welfare payments to previously unbanked citizens is also a system that can condition those payments on behavioural compliance, restrict their use to approved categories, or suspend them for individuals who fall into disfavour with the issuing authority. The inclusion and the control are not in tension with each other at the technical level. They are features of the same system.

For many developing countries, the CBDC discussion intersects with the dollar dominance question examined elsewhere in this edition. The existing international payments system is built on dollar clearing infrastructure. Cross-border transactions between, say, a Kenyan bank and a Vietnamese bank typically pass through a US correspondent bank, in dollars, subject to US regulatory jurisdiction and potentially US sanctions law. A country that is not in political alignment with Washington faces the possibility that its access to this infrastructure can be restricted or severed.

CBDCs and the cross-border platforms being built to connect them, most significantly mBridge, represent an alternative architecture that bypasses dollar clearing entirely. A transaction between the central banks of two mBridge member countries can settle directly, in their own currencies, without touching the US financial system. The geopolitical implications of this are significant and have been noted explicitly by US officials, who have expressed concern about mBridge as an instrument for sanctions evasion.

Both readings are accurate simultaneously. mBridge does offer countries an alternative to dollar-denominated clearing that is less subject to US extraterritorial jurisdiction. It also happens to be a platform that China helped design and in which China is the largest participant. The question of which dependency is preferable, subordination to US dollar infrastructure or participation in a Chinese-led alternative, is not straightforwardly answered, and different countries are reaching different conclusions based on their own geopolitical calculus.

In most of the 68 jurisdictions currently developing or operating CBDCs, the public debate about the design choices involved has been limited. The technical specifications that determine whether a CBDC will have programmable restrictions, what transaction data will be retained and by whom, what the conditions are for account suspension, and what oversight mechanisms will govern central bank access to individual transaction data are being decided largely within central bank technical teams and finance ministries, with minimal parliamentary scrutiny and even less public engagement.

This is partly a function of the complexity of the subject matter and partly a function of the speed at which the technology is being deployed. It is also, in some cases, a deliberate design choice: the less public attention a CBDC rollout attracts, the fewer the political constraints on the design decisions being made. The world was not watching in 2026. That inattention has a cost, and the cost will be paid by the people whose money is being redesigned.