Tokenized Money Glossary

A central bank digital currency, or CBDC, is a digital payment instrument denominated in the national unit of account and issued as a direct liability of the central bank.

Central bank money is money that is a direct liability of a central bank. It includes central bank-issued banknotes and reserve or settlement balances held by eligible institutions, and it can also include a central bank digital currency.

Commercial bank money consists primarily of deposit liabilities issued by commercial banks and used by households and businesses to make payments and hold monetary balances.

A digital bearer instrument is a transferable digital claim that can circulate from holder to holder without requiring the issuer to update an account for each transfer.

Digital currency is a broad term for monetary value or money-like claims represented and transferred electronically.

A digital settlement asset is a digitally represented asset used to discharge payment, securities, foreign-exchange, or other financial obligations on a digital platform.

A monetary liability is an obligation of an issuer that functions as money or as a redeemable monetary claim for its holder.

Programmable money is digital money whose units carry conditions on their use, such as restrictions on eligible goods, recipients, locations, or time periods.

Programmable settlement is the use of software-defined rules to coordinate or execute settlement when specified conditions are satisfied.

A retail central bank digital currency is a digital central bank liability designed for use by the general public in everyday payments and monetary holdings.

A synthetic CBDC is a policy model in which private institutions issue digital money that is fully backed by central bank reserves or another direct claim on central bank money.

A tokenized deposit is a commercial bank deposit liability recorded on a tokenized or programmable ledger. The depositor's claim remains a claim on the issuing commercial bank.

A tokenized financial asset is a financial asset or claim represented on a programmable digital ledger in tokenized form.

Tokenized money refers to money or monetary claims represented on a digital ledger in tokenized form, often with programmable transfer and settlement functionality.

A wholesale central bank digital currency is a digital central bank liability designed for use by eligible financial institutions in interbank, securities, or other wholesale settlement.