What are Digital Assets?

What are digital assets?
Digital assets can include cryptoassets, stablecoins, tokenised deposits, CBDCs and tokenised traditional assets. Similar technology can represent very different types of money, assets and financial claims.

What should you ask when assessing a digital asset?
Consider what it represents, who stands behind it and what rights the holder has. These characteristics often matter more than the technology itself.

How does DLT differ from traditional infrastructure?
Traditional financial institutions often maintain separate records that must be exchanged and reconciled. DLT enables authorised participants to maintain shared or synchronised records across a network.

What are wallets and cryptographic keys used for?
Wallets allow users to interact with digital-asset networks. Public addresses identify where assets can be sent, while private keys are used to authorise transactions.

What is tokenisation?
Tokenisation represents rights to an asset using digital tokens. It can change how an asset is issued, recorded, transferred and settled without necessarily changing its underlying economics.

Why might digital assets be useful?
Potential benefits include faster settlement, programmability, greater collateral mobility, wider operating hours and reduced reconciliation. These benefits depend on the design and adoption of the wider infrastructure.