Synthetic central bank digital currency (sCBDC) — Public private CBDC collaboration

Jonas Gross
13 min readJul 25, 2020

Authors: Anna Maria Bracio, Jonas Gross

Central bank digital currencies (CBDCs) more and more approach reality. One special form of a CBDC is a synthetic CBDC (sCBDC). In such a setup, the CBDC system is not directly managed by the central bank, but a wide range of tasks is outsourced to private companies, such as e-money institutes. In the case of such a private public partnership, financial institutions fully back e-money with riskless central bank money. This results in a synthetic CBDC, a digital form of (e-)money that is fully backed by riskless central bank money. In this article, we explain and discuss such an sCBDC system in the context of the Euro area and compare it to a “classical” CBDC system.


Today, central bank digital currencies (CBDCs) are discussed all over the world. According to a study by the Bank for International Settlements (BIS), 80% of worldwide central banks currently analyze the issuance of a CBDC (Boar, Holden, Wadsworth, 2020). One special CBDC form is so-called synthetic CBDCs (sCBDCs) as a special form of public private collaboration. An advantage of an sCBDC compared to a CBDC is that in such an sCBDC setup the central bank has fewer responsibilities as in a CBDC system, therefore, needing fewer resources and being able to focus on its core competencies.

The term sCBDC was introduced by Tobias Adrian and Tommaso Mancini-Griffoli from the International Monetary Fund (Adrian 2019; Adrian, Mancini-Griffoli, 2019). After few central banks such as the Hong Kong Monetary Authority and the Swiss National Bank have given e-money providers necessary licenses for issuing sCBDCs (Adrian, Mancini-Griffoli, 2019, p. 12), the idea of sCBDC is now beginning to become more and more relevant. It seems that new innovations by the private sector as well as innovative competition from international financial institutions, force central banks like the European Central Bank (ECB) to take action and think about their future role in the monetary system. This article explains sCBDC as one special form of a CBDC and analyzes the relevance of sCBDC for the Euro Area.

What is an sCBDC?

Based on Adrian (2019) and Adrian and Mancini-Griffoli (2019), sCBDC can be described as a type of CBDC in the form of a public private partnership in that e-money providers get access to central bank money…

Jonas Gross

Jonas Gross is Chairman of the Digital Euro Association (DEA) and COO at etonec. Further, Jonas holds a PhD in Economics.