Tokenized Money Glossary
Tokenized Money
Tokenized money refers to money or monetary claims represented on a digital ledger in tokenized form, often with programmable transfer and settlement functionality.
Explanation
Tokenization represents financial assets or liabilities on programmable digital ledgers. Applied to money, the underlying issuer and claim remain decisive. A tokenized commercial bank deposit remains a bank liability, while a wholesale CBDC is a direct central bank liability. Stablecoins use a different institutional structure and can carry separate reserve and redemption arrangements. Shared ledger technology can place these instruments on similar technical rails without giving them the same credit, legal, or settlement properties.
Why it matters
Tokenized money can combine payment, settlement, and programmable execution on digital platforms while preserving or altering the institutional structure of the underlying form of money.
Example
A commercial bank can represent a deposit liability on a programmable ledger while keeping the deposit as a liability of the same bank.
Related terms
Last reviewed: September 2026