A central bank digital currency would likely be implemented using a database run by the central bank, government, or approved private-sector entities.[8][9][10] The database would keep a record (with appropriate privacy and cryptographic protections) of the amount of money held by every entity, such as people and corporations.[8]

In contrast to cryptocurrencies, a central bank digital currency would be centrally controlled (even if it was on a distributed database), and so a blockchain or other distributed ledger would likely not be required or useful - even as they were the original inspiration for the concept.[8][9][10]

A CBDC is a high-security digital instrument; like paper banknotes, it is a means of payment, a unit of account, and a store of value.[22] And like paper currency, each unit is uniquely identifiable to prevent counterfeiting.[23]

Digital fiat currency is part of the base money supply,[24] together with other forms of the currency. As such, DFC is a liability of the central bank just as physical currency is.[25] It is a digital bearer instrument that can be stored, transferred and transmitted by all kinds of digital payment systems and services. The validity of the digital fiat currency is independent of the digital payment systems storing and transferring the digital fiat currency.[26]

Proposals for CBDC implementation often involve the provision of universal bank accounts at the central banks for all citizens.[27][28]