Token- or Account-Based? A Digital Currency Can Be Both

Rodney Garratt, Michael Lee, Brendan Malone and Antoine Martin

No 20200812, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Digital currencies, including potential central bank digital currencies (CBDC), have generated a lot of interest over the past decade, since the emergence of Bitcoin. The interest has only grown in recent months because of a desire for contactless payment methods, stemming from the coronavirus pandemic. In this post, we discuss a common distinction made between “token-based” and “account-based” digital currencies. We show that this distinction is problematic because Bitcoin and many other digital currencies satisfy both definitions.

Keywords: account; token; cryptocurrency; bitcoin (search for similar items in EconPapers)
JEL-codes: E42 (search for similar items in EconPapers)
Date: 2020-08-12
New Economics Papers: this item is included in nep-mac, nep-mon and nep-pay
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