This paper studies how retail central bank digital currency (CBDC) interacts with bailout policies in a Diamond-Dybvig-style banking model. It finds that while bailouts expand run risk, introducing CBDC provides a safe outside option that can lower withdrawal thresholds and stabilize the system. A credible no-bailout commitment combined with CBDC enhances financial stability, reduces fiscal costs, and improves welfare, showing that policy design and digital currency together can mitigate banking fragility.