Definition ∞ A digital payment token is a digital asset primarily used for making payments or transferring value. These tokens function as a medium of exchange within a blockchain ecosystem or across various platforms, enabling transactions for goods, services, or remittances. Unlike security tokens or utility tokens, their primary purpose is transactional. Bitcoin and various stablecoins are common examples, facilitating direct peer-to-peer or business-to-consumer payments.
Context ∞ The situation surrounding digital payment tokens involves increasing regulatory clarity and efforts to integrate them into mainstream financial systems. A key debate concerns the regulatory classification of various tokens and the potential for central bank digital currencies (CBDCs) to alter the payment landscape.
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