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Digital money and finance: a critical review of terminology

Author

Listed:
  • Bindseil, Ulrich
  • Coste, Charles-Enguerrand
  • Pantelopoulos, George

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

Suggested Citation

  • Bindseil, Ulrich & Coste, Charles-Enguerrand & Pantelopoulos, George, 2025. "Digital money and finance: a critical review of terminology," Working Paper Series 3022, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20253022
    Note: 327704
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    CBDC; DeFi; digital assets; DLT; tokenization;
    All these keywords.

    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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