Wholesale Digital Cash

Definition ∞ Wholesale Digital Cash refers to a form of digital currency designed for use by financial institutions for interbank settlements and large-value transactions. Unlike retail digital currencies intended for public use, wholesale digital cash is restricted to a limited set of authorized participants. It aims to enhance the efficiency and security of financial market infrastructures.
Context ∞ The development of wholesale digital cash, often explored by central banks and commercial banks, is a key area of innovation in modernizing payment systems. Its potential benefits include faster, more secure, and more cost-effective interbank settlements, particularly across borders. A critical debate centers on its design, governance, and interoperability with existing financial market infrastructures, influencing the future structure of wholesale finance and its integration with digital asset systems.