Retail and wholesale CBDC: one currency, one system

Different use cases call for different kinds of central bank digital currencies (CBDCs), goes the currently accepted reasoning. The Bank for International Settlements (BIS) notes that central banks across jurisdictions pursue retail CBDC for use by the public for their everyday payments, and wholesale CBDC for interbank and financial market settlements.

This distinction is maintained across surveys and publications in the field. The industry follows suit in proofs of concept, pilot projects, and even production-level rollouts. In its most recent industry-wide survey, BIS found that central banks typically pursue wholesale CBDC (wCBDC) and retail CBDC (rCBDC) for distinct reasons, whether in terms of policy or for operational reasons.¹ 

This binary approach has dominated the CBDC discourse thus far. But if we look at CBDC just as public money, there is a case to be made for an approach to CBDC that takes use case out of the equation. 

Indeed, there are clear benefits to central banks and end users if rCBDC and wCBDC come together in one unified public currency system that supports interoperability across both conventional and tokenized ecosystems. 

Why central banks pursue wCBDC

The reasons why a particular country chooses to pursue a retail CBDC can range from financial inclusion to monetary sovereignty – and everything in between. Generally speaking, however, central banks tend to move toward wholesale CBDCs for the same reasons. These include:

• Enhancing liquidity-saving mechanisms through more settlement efficiency, especially in securities and foreign-exchange markets
• Enabling atomic and conditional delivery-versus-payment (DvP) or payment-versus-payment (PvP) mechanisms, minimizing risk while accelerating market operations
• Providing an interface for conventional real-time gross settlement (RTGS) infrastructure with tokenized asset platforms, and integrating with ISO 20022–based messaging systems
• Preparing for cross-border CBDC operability, and providing a robust regulatory alignment across multiple jurisdictions that allows for secure deployment and widespread adoption and scalability

The priorities are clear: interoperability, programmability, and operational certainty are essential for wCBDC to progress from pilot to production. Further, a flexible architecture is essential, supporting both token- and account-based models to address diverse legal and market needs. 

Tokenization: think beyond the chain

When considering an on-chain deployment, a valid way to start is by identifying the objectives – and motivations – for utilizing distributed ledger technology (DLT) for a tokenized national currency system such as a CBDC. It is essential that the issuer be a central authority, otherwise the minted money token will be a stablecoin or tokenized deposit instead of a CBDC

Secondly, the objective should be to enable a form of digital public infrastructure (DPI) that provides a new form of money for payments and settlements, increasing efficiency and resilience while building a public platform for innovation.

While we’re discussing tokenization and CBDC, let’s clarify some common misconceptions:

• A cryptographically minted token (such as what you might find in an unspent transaction output, or UTxO) does not have to be deployed or stored on-chain for tokenization to be valuable. An off-chain solution such as a distributed database can provide similar benefits.
• Strictly speaking, CBDC implementations do not require DLT. Other architectures are possible, including those for wCBDC.
• Programmability can be achieved through various means, not only via on-chain smart contracts. Off-chain programmable logic at the wallet level is also feasible.
• The deployment of mainstream financial assets on-chain does not imply that central bank money must also be issued on that same chain. Central banks can choose different infrastructures based on their own technical and regulatory requirements.

These options give central banks the flexibility they need while avoiding DLT lock-in in a multi-chain environment. As central banks and market players consider the best design for CBDCs and tokenized assets, it is important to remember that there is no single solution. Each jurisdiction will require its own tailored approach. 

The uniformity of digital public money

Having said all that, let’s return to our original idea: why is it necessary to distinguish between retail and wholesale CBDC? 

A CBDC is simply a digital form of cash. Just as a banknote remains a banknote regardless of its use, it stands to reason that a digital public currency should be treated the same way. Put another way, why not have a uniform CBDC system?

“Wholesale or retail; settlements, transfers, or payments: the use case should not alter a CBDC’s fundamental monetary qualities as a form of public money,” said Abbas Albasha, Senior Strategy Consultant CBDC at G+D. The core attributes that mark a CBDC out as “public money” or even legal tender are not dependent on how it is used.

Keep in mind that the primary technical objective of a CBDC is to create a cryptographically secure, tokenized form of public money that complements existing forms, namely, physical cash and digital reserves. It is technically feasible to implement an integrated CBDC system that mints a single central bank money token, which can be used across wholesale and retail CBDC use cases, including offline and cross-border scenarios.

Such a currency system would include both wholesale wallets that are accessible only to financial service providers, and retail wallets that are accessible only to end users and merchants. Wholesale and retail CBDC in circulation could then be measured as the sum of CBDC in each wallet type. In this model, cross-wallet transfers would be the only factor that distinguishes CBDC tokens as either wholesale or retail.

One core, many doors: a unified digital currency system

G+D’s technology supports a unified approach to wholesale and retail use cases. This ensures the uniformity of money, privacy, and security, while also fostering innovation and encouraging competition across the ecosystem. 

A central bank can choose to begin with wholesale applications such as interbank and securities settlements, and then enable retail access that involve consumer payments and merchant settlement at a later date. It can also choose to take the opposite route, without having to rebuild the core infrastructure. 

This flexibility stems from a core design principle, that CBDC is CBDC, just as physical cash is cash. Decoupling it from its use cases can be a net positive to central banks and other stakeholders in the digital public currency ecosystem. 

Published: 06/04/2026