Glossary
26 terms, defined from the source.
Plain-English definitions paraphrased from the law, standard or central-bank publication linked under each term. Not legal advice.
- Asset-referenced token (ART)
- Under MiCA, a crypto-asset that is not an e-money token and that purports to maintain a stable value by referencing another value or right, or a combination of them, including one or more official currencies.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Atomic settlement
- Settlement in which the transfer of an asset and the corresponding payment occur simultaneously and inseparably: either both happen or neither does. It is often cited as a benefit of tokenised platforms.
- Source: BIS Annual Economic Report 2023, ch. III: Blueprint for the future monetary system ↗
- Central bank digital currency (CBDC)
- A digital form of central bank money that is different from balances in traditional reserve or settlement accounts. It is a direct liability of the central bank.
- Source: BIS CPMI, Central bank digital currencies (2018) ↗
- Crypto-asset service provider (CASP)
- Under MiCA, a legal person or undertaking whose occupation or business is to provide one or more crypto-asset services, such as custody, trading platforms, exchange or transfer services, to clients. It must be authorised by a national competent authority, which allows it to passport across the EU.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Crypto-asset white paper
- The disclosure document MiCA requires before crypto-assets are offered to the public or admitted to trading. It describes the issuer, the project, rights, technology and risks.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Digital euro
- The ECB's proposed retail CBDC for the euro area: a digital form of cash issued by the Eurosystem, distributed through supervised intermediaries such as banks.
- Source: ECB, Digital euro ↗
- Distributed ledger technology (DLT)
- Technology that maintains a shared, synchronised record of transactions across multiple participants or nodes. Blockchains are one type of DLT.
- Source: BIS CPMI, Central bank digital currencies (2018) ↗
- E-money token (EMT)
- Under MiCA, a crypto-asset that purports to maintain a stable value by referencing the value of one official currency. EMTs may only be issued by credit institutions or electronic money institutions.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Global stablecoin arrangement (GSC)
- A stablecoin arrangement with potential reach and use across multiple jurisdictions that could become systemically important. The FSB recommends comprehensive, cross-border regulation and supervision of such arrangements.
- Source: FSB, High-level Recommendations for Global Stablecoin Arrangements (2023) ↗
- Group 1 and Group 2 cryptoassets
- Basel Committee classification for bank capital purposes. Group 1 covers tokenised traditional assets (1a) and stablecoins with effective stabilisation mechanisms (1b) that meet classification conditions. Group 2 covers all other cryptoassets, which receive more conservative treatment.
- Source: Basel Committee, Prudential treatment of cryptoasset exposures (d545) ↗
- MiCA
- The EU Markets in Crypto-Assets Regulation, which sets uniform EU rules for issuing crypto-assets to the public and for crypto-asset service providers, including authorisation, conduct, disclosure and supervision.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Payment stablecoin
- Under the US GENIUS Act, a digital asset designed to be used for payment or settlement that the issuer is obliged to redeem for a fixed amount of monetary value and that is backed by reserves. Only permitted issuers may issue payment stablecoins in the US.
- Source: GENIUS Act (S.1582, 119th Congress), Congress.gov ↗
- Permitted payment stablecoin issuer
- Under the GENIUS Act, an entity approved to issue payment stablecoins, such as a subsidiary of an insured depository institution, a federal qualified issuer approved by the OCC, or a state-qualified issuer.
- Source: GENIUS Act (S.1582, 119th Congress), Congress.gov ↗
- Redemption at par
- The holder's right to redeem a stablecoin for the referenced fiat currency at face value. Both MiCA (for e-money tokens) and the GENIUS Act require timely redemption at par.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Reserve assets
- The assets an issuer holds to back outstanding stablecoins, such as cash, deposits and short-dated government securities. Stablecoin rules typically require at least 1:1 backing, segregation and regular public disclosure of reserve composition.
- Source: GENIUS Act (S.1582, 119th Congress), Congress.gov ↗
- Retail CBDC
- A CBDC intended for use by the general public, such as households and businesses, for everyday payments, typically distributed through intermediaries.
- Source: BIS CPMI, Central bank digital currencies (2018) ↗
- Settlement finality
- The legally defined moment at which a transfer becomes irrevocable and unconditional. The PFMI require financial market infrastructures to provide clear and certain final settlement.
- Source: CPMI-IOSCO, Principles for financial market infrastructures ↗
- Significant e-money token
- An EMT that meets MiCA criteria on size, customer numbers, transaction volume or interconnectedness. Significant EMTs face additional requirements and EBA supervisory involvement.
- Source: Regulation (EU) 2023/1114 (MiCA), EUR-Lex ↗
- Stablecoin
- A crypto-asset designed to maintain a stable value relative to a specified asset or pool of assets, typically a fiat currency. Regulators distinguish stablecoins by what backs them, who issues them and whether holders have a redemption claim.
- Source: FSB, High-level Recommendations for Global Stablecoin Arrangements (2023) ↗
- Tokenisation
- The process of recording claims on real or financial assets on a programmable platform, such as a distributed ledger, so they can be transferred and settled as tokens.
- Source: BIS Annual Economic Report 2023, ch. III: Blueprint for the future monetary system ↗
- Tokenised deposit
- A commercial bank deposit recorded as a token on a programmable ledger. It remains a liability of the issuing bank, unlike a stablecoin issued by a non-bank. Also called a deposit token.
- Source: BIS Annual Economic Report 2023, ch. III: Blueprint for the future monetary system ↗
- Travel rule
- The FATF requirement that VASPs and financial institutions obtain, hold and transmit required originator and beneficiary information with virtual-asset transfers, mirroring rules for wire transfers.
- Source: FATF, Virtual assets ↗
- Unified ledger
- A BIS concept of a common programmable platform that brings together tokenised central bank money, tokenised deposits and tokenised assets so transactions can settle atomically.
- Source: BIS Annual Economic Report 2023, ch. III: Blueprint for the future monetary system ↗
- Virtual asset (VA)
- In FATF standards, a digital representation of value that can be digitally traded or transferred and used for payment or investment purposes, excluding digital representations of fiat currencies and securities already covered elsewhere.
- Source: FATF, Virtual assets ↗
- Virtual asset service provider (VASP)
- In FATF standards, a business that conducts exchange, transfer, safekeeping or issuance-related services for virtual assets on behalf of another person. VASPs are subject to AML/CFT obligations.
- Source: FATF, Virtual assets ↗
- Wholesale CBDC
- A CBDC with access restricted to financial institutions, used for interbank settlement and potentially for settling tokenised wholesale transactions.
- Source: BIS CPMI, Central bank digital currencies (2018) ↗