Tokenized Central Bank Money

Definition ∞ Tokenized central bank money refers to a digital representation of a central bank’s liabilities, issued on a distributed ledger technology (DLT) platform. This differs from traditional reserves by being digitally programmable and potentially offering new functionalities for wholesale financial settlement. It represents a direct claim on the central bank, carrying the highest degree of safety and finality in a digital form. Such money could revolutionize interbank transactions.
Context ∞ The development of tokenized central bank money, often referred to as wholesale Central Bank Digital Currency (CBDC), is a major focus for central banks globally. News frequently covers pilot programs and research initiatives exploring its potential to enhance efficiency, reduce settlement risks, and support innovation in financial market services. Discussions often center on its implications for monetary policy, financial stability, and cross-border payments.