Wholesale digital money refers to digital currency used for transactions between financial institutions. This form of digital money is distinct from retail digital currencies and is typically used for large-value interbank settlements, central bank operations, or corporate payments. It often involves central bank digital currencies (CBDCs) or tokenized commercial bank money operating on private, permissioned distributed ledgers. The purpose is to enhance efficiency, reduce settlement risk, and lower costs in high-value financial transactions.
Context
The state of wholesale digital money is a significant area of central bank and interbank research, with numerous pilot projects exploring its practical applications. Key discussions center on the design choices for wholesale CBDCs, their impact on monetary policy, and interoperability with existing payment systems. Future developments anticipate the gradual implementation of wholesale digital money solutions, potentially reshaping the landscape of interbank payments and large-value settlements globally.
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