Journal of Financial Market Infrastructures
ISSN:
2049-5404 (print)
2049-5412 (online)
Editor-in-chief: Manmohan Singh
Digital money and finance: a critical review of terminology
Ulrich Bindseil, Charles-Enguerrand Coste and George Pantelopoulos
Need to know
- Since 2008, crypto-assets and decentralized finance (DeFi) have gained prominence and generated a fast-evolving and diverse terminology. This terminology can be confusing due to the rapid pace of developments and the appropriation of terms by various stakeholders.
- This paper reviews the emerging terminology and challenges in its current usage and provides an etymology of key terms and concepts.
- Key terms discussed include “crypto-assets”, “smart contracts”, “tokenization”, “stablecoin” and “wholesale/retail CBDC”, all of which in a hypothetical scenario of a from-scratch design of terminology would warrant reconsideration.
- By examining these issues, the paper seeks to encourage more thoughtful and precise language, contributing to better communication and policy outcomes.
Abstract
The digitalization of payments has accelerated in recent decades with internet banking and ever faster and cheaper computing. Many believe decentralized finance now offers fundamentally new possibilities for trading, payments and settlement. Moreover, for a few years, central banks have been launching work on what have been called retail and wholesale central bank digital currencies. The rise of innovative technologies has seen the advent of new terminology, which is widely used but often seems to be biased, confusing or used inconsistently. By providing an etymology of the key concepts and reviewing the terminology and definitions, this paper provides a new approach to clarifying the core concepts of new payments technologies in order to facilitate ongoing discussions about their eventual merits and use cases.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
