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Definition: digital currency


An umbrella term for a medium of exchange that is maintained in the computer. There are three forms of digital currency. The traditional digital currency is using the computer to manage money such as a bank or brokerage account. The second method is a government-issued digital currency, known as a "central bank digital currency" (CBDC). For example, Sweden started its e-krona CBDC in 2017, and dozens of countries are initiating or exploring CBDCs. The third digital currency is a cryptocurrency, which is the most controversial because there is no central control. See CBDC, cryptocurrency, virtual currency and digital money.