Digital money and finance: a critical review of terminology

Ulrich Bindseil, Charles-Enguerrand Coste and George Pantelopoulos

No 3022, Working Paper Series from European Central Bank

Abstract: The digitalisation of payments has accelerated over the last decades with the internet and ever faster and cheaper computing. Now, many believe that decentralised finance (“DeFi”) offers fundamentally new possibilities for trading, payments and settlement. Moreover, for a few years central banks have launched work on what has been called retail and wholesale central bank digital currencies (“CBDC”). Concurrent to the rise of innovative technologies has been the advent of new terminology, which is widely used, but which often seems to be biased, confusing, or is used inconsistently. By providing an etymology of key concepts and reviewing terminology and definitions, this paper also provides a new approach to clarifying the essence of new technologies in the field of payments to facilitate ongoing discussions about their eventual merits and use cases. JEL Classification: B26, E42

Keywords: CBDC; DeFi; digital assets; DLT; tokenization (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-cba, nep-mon and nep-pay
Note: 327704
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253022

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