DIGITAL MONEY AND TOKENIZED ASSETS

Cryptocurrency

A digital asset designed to function as a medium of exchange, using cryptography to secure transactions and control creation of new units. Unlike tokenized deposits or stablecoins, cryptocurrencies typically have variable market prices and are not pegged to fiat.

EXAMPLE

Banks evaluating custody services distinguish between cryptocurrency holdings (volatile BTC, ETH) and stablecoin balances (USDC, USDT) given their different risk and regulatory profiles.

Relevant Roles and Functions

On-chain Role
Head of Stablecoin and Digital Money Strategy
Function
CBDC Interoperability
Institutional Payment Rails
Real-time Settlement
Stablecoin Issuance + Integration
Tokenized Deposits
TradFi Equivalent
Deposit Products
Payments
Treasury

Related Terms

Bitcoin

The first and most widely recognized cryptocurrency, launched in 2009 as a decentralized digital currency operating on a public blockchain without central authority. Bitcoin serves as both a store of value and the foundational proof-of-concept for blockchain technology.

Example

MicroStrategy's treasury strategy of holding bitcoin on its balance sheet prompted institutional debate about whether BTC qualifies as a reserve asset under evolving accounting standards.

Ethereum

Generally considered the largest public blockchain holding the highest Total Value Locked (TVL) of $55.7 billion. Designed as a programmable platform that enables smart contracts and decentralized applications. Ethereum’s transition to Proof of Stake and Layer 2 scaling solutions have made it the primary infrastructure for institutional tokenization.

Example

BlackRock's BUIDL fund was launched on Ethereum due to its established ecosystem of institutional custody, settlement rails, and regulatory clarity compared to alternative chains.

Stablecoin

A digital token designed to maintain a stable value, typically pegged 1:1 to a fiat currency and backed by reserve assets or algorithmic mechanisms. Unlike tokenized deposits, stablecoins are generally issued outside the regulated banking system.

Example

Circle's USDC stablecoin settled over $400B in adjusted on-chain transactions in 2025, increasingly used by institutions for treasury and cross-border payments.

Digital Asset Custody

The safekeeping and administration of digital assets—including private key management, transaction signing, and regulatory reporting—on behalf of institutional clients. It is widely regarded as the foundational control point for institutional participation in on-chain markets.

Example

Northern Trust's digital asset custody service for tokenized fund shares handles key management, NAV reporting, and regulatory compliance in a single integrated platform.