Digital Asset Definitions

Home 5 Digital Asset Definitions
Below is a list of definitions that you may find useful as you navigate the complicated jargon of the digital asset space. It is far from comprehensive, but covers the terms I use most often when discussing digital assets. 
The first digital asset. It is “mined” by using a computer to solve complicated algorithms as a consensus mechanism. Only 21 million bitcoin will ever be mined, creating scarcity and value.
A public record that can be used to track transactions that does not rely on an external authority to track and maintain the integrity of the data. Any sort of information, such as contracts and financial transactions, can be stored on the blockchain.  Think of an excel spreadsheet that everyone has a copy of, and changes to that spreadsheet are reflected across everyone’s spreadsheets. Adding to a blockchain doesn’t delete previous data, but instead creates a new “block” that references prior data. This creates certainty and security in the information.
Central Bank Digital Currency (CBDC)
A U.S. central bank digital currency (CBDC) is a digital version of the U.S. Dollar that is a claim on the Federal Reserve (versus a payment stablecoin which is a claim on a financial institution). CBDCs come in two forms: (1) wholesale, which could be used for settlements between banks, credit unions and other financial institutions; and (2) retail, which could be used for payments between individuals. Should Congress choose to pursue a wholesale or retail CBDC, it would be regulated and maintained by the Federal Reserve.
Commodity Futures Trading Commission (CFTC)
The CFTC oversees the U.S. commodities and derivatives markets to foster open, transparent, competitive, and financially sound markets. It aims to protect market participants from fraud, market manipulation, and other unethical practices.
Virtual Currency
A form of digital assets, also known as cryptocurrency. It is a medium of exchange, store of value or unit of account that uses the blockchain. Bitcoin and ether are examples of virtual currency.
Digital Asset
Anything that is stored virtually and can be owned or purchased. These can take the form of virtual currencies like bitcoin, payment stablecoins, information stored on the blockchain, and non-fungible tokens (NFTs). While many things count as “digital assets”, we are mainly referring to assets that are verifiable on the blockchain, easily transferrable on a peer-to-peer baisis, and have a mutually agreed upon value.
Fiat Currency
Money that is issued by a government. The U.S. dollar is an example of a fiat currency.
Securities and Exchange Commission (SEC)
The SEC oversees securities exchanges, securities brokers and dealers, investment advisors, and mutual funds in an effort to promote fair dealing, the disclosure or important market information, and to prevent fraud. 
Special Purpose Depository Institution
A Special Purpose Depository Institution (SPDI) is a bank that can receive deposits and hold assets like most banks. They were created in Wyoming to focus on digital assets. They predominately act as custodians of digital assets, though they can hold traditional assets like cash as well. In general, they are not allowed to issue loans using customer deposits like a traditional bank can and are required to maintain 100% of their deposits in reserve.
Payment Stablecoin
A stablecoin is a virtual currency that is tied directly to the value of another currency or commodity, likely a fiat currency. It is created to hold a stable value and create efficiency in financial transactions.
Virtual Currency (also known as Cryptocurrency)
A store of value that only exists digitally. It is essentially computer code that has mutually agreed upon value. Individual currencies are uniquely identifiable by the information stored on a blockchain. Some examples of virtual currencies are bitcoin, etherum, and cardano, though there are thousands of different virtual currencies that serve different purposes.
For more digital asset definitions, there are several resources available, including this “cryptopedia.” (