Definition ∞ A tokenized payment is a method of conducting transactions where traditional payment credentials, such as credit card numbers, are converted into a unique, encrypted digital token. This token is then used to process the payment, enhancing security by preventing the exposure of sensitive account information. It represents a digital stand-in for actual payment details. This process reduces the risk of data breaches and fraud.
Context ∞ While broadly applicable in traditional e-commerce, tokenized payment systems are also relevant in the digital asset space, particularly concerning stablecoins and central bank digital currencies CBDCs. In crypto, a tokenized payment can refer to using a digital asset, such as a stablecoin, as a medium of exchange. News often discusses the efficiency and security benefits of using tokenized forms of value for everyday transactions. The development of these systems is a key step towards a more digital financial ecosystem.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
