Payment Tokens

Definition ∞ Payment tokens are a category of digital assets primarily designed to function as a medium of exchange for goods and services. These tokens enable direct transfers of value between parties on a blockchain network. They facilitate transactions without requiring traditional financial intermediaries, offering a decentralized alternative for payments. Examples include cryptocurrencies like Bitcoin or stablecoins.
Context ∞ The classification and regulation of payment tokens are significant topics in global financial news, particularly with the rise of central bank digital currencies (CBDCs) and stablecoins. Regulators are working to distinguish payment tokens from other digital assets like utility or security tokens, which carry different regulatory implications. The ongoing discussions aim to establish clear legal frameworks that support the safe and efficient use of digital assets for everyday transactions.