A Certificate of Deposit is a financial product offered by banks that holds a fixed sum of money for a specified period at a fixed interest rate. These instruments typically provide higher interest returns compared to standard savings accounts, in exchange for a commitment to keep funds deposited until maturity. Early withdrawals usually incur penalties, making them suitable for conservative, long-term savings objectives.
Context
While a traditional financial instrument, the Certificate of Deposit is relevant in crypto news when comparing stablecoin yields or discussing potential regulated digital asset offerings. Debates often consider how conventional low-risk investments stack against digital asset returns. This comparison provides context for understanding risk and return profiles across traditional and digital financial products.
The central bank's pilot tokenizing Certificates of Deposit with wholesale CBDC establishes a high-velocity, T+0 settlement layer for domestic money markets.
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