A central bank digital currency (CBDC) is a digital form of a country's currency, issued directly by its central bank. It is the equivalent of banknotes and coins, except that it is digital. The Central Bank of Iceland uses the term seðlabankarafeyrir for the idea, and rafkróna for a possible Icelandic version.
How is a CBDC different from other money?
The krónur in your bank account are a claim on your bank, not on the Central Bank. Banknotes and coins are the only money that gives the public a direct claim on the central bank. A CBDC would add a digital version of that kind of money.
A CBDC is not a CryptocurrencyCryptocurrencyA digital currency secured by cryptography and recorded on a shared ledger, with no bank or government issuing or controlling it. like bitcoin. The central bank controls the supply, its value is the same as the national currency, and the system is centralised. Nor is a CBDC a StablecoinStablecoinA cryptocurrency designed to keep a steady price, usually by tracking the US dollar or another currency., which private companies issue and tie to a fiat currencyFiat currencyGovernment-issued money whose value rests on law and trust rather than gold, like the Icelandic króna..
Where do things stand?
Only a handful of central banks have issued a CBDC to the public, including those of the Bahamas and Nigeria. China has tested a digital yuan on a large scale.
The European Central Bank is preparing a digital euro. The Council of the EU agreed its position on the legislation in December 2025 and the European Parliament in July 2026, and in October 2026 the final text was being negotiated. Under the ECB's plan of August 2026, a pilot is to start in the second half of 2027, and if the law were adopted by the end of 2026 the ECB could be ready to issue the digital euro in 2029, but the final decision will only be taken once the law is in place. Iceland is not in the euro area, so a digital euro would not be Iceland's currency.
The Central Bank of Iceland has discussed a possible rafkróna in publications from 2018 and 2023. Neither proposes issuing one, and the Bank has said that any such decision would only be taken with the government's involvement and after consulting the public.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.