Compare · Forms of money
Forms of money — a decision table for boards
Digital money is not one thing. Cash, bank deposits, CBDCs, payment stablecoins, native crypto, and tokenized deposits are different liability stacks. Compare the issuer, settlement model, privacy, policy link, and compliance surface before choosing a rail.
What is in scope?
Start with the liability, not the interface. The same wallet-like experience can represent a central-bank claim, a bank deposit, an issuer promise, or a volatile protocol asset.
Cash
Notes and coins issued by a central bank.
Commercial-bank deposits
Bank liabilities accessed through accounts, cards, RTP, ACH, or wires.
CBDCs
Retail or wholesale central-bank money where issued or piloted.
Payment stablecoins
Fiat-referenced tokens issued under a product or regulatory regime.
Native crypto
Protocol-native assets such as BTC and ETH with no central issuer.
Tokenized claims
Bank deposits, funds, or other off-chain claims represented on-chain.
Master comparison
Qualitative teaching tool. National designs and product terms differ; this is not a ranking.
| Property | Cash | Bank deposit | Retail CBDC | Payment stablecoin | BTC / ETH | Tokenized deposit |
|---|---|---|---|---|---|---|
| Issuer / liability | Central bank | Commercial bank | Central bank | Issuer + reserves | No issuer; protocol | Commercial bank |
| Unit of account | National fiat | National fiat | National fiat | Usually fiat-pegged | Own unit | National fiat |
| Price vs fiat | Par | Par | Par by design | Targets par; depeg risk | Volatile | Par; bank liability |
| Settlement finality | Immediate P2P | Deferred / RTP varies | Instant by design goal | Chain finality + redemption | Probabilistic / chain-specific | Design-dependent |
| Programmability | None | Limited bank APIs | Conditional payments | High; smart contracts | High | High within bank rules |
| Privacy | High offline | Bank visibility | Policy choice; often tiered | Pseudonymous on-chain; KYC off-ramps | Pseudonymous | Bank-grade KYC |
| Offline capability | Yes | No | Often a design goal | Rare / experimental | Rare | Rare |
| Cross-border | Poor | Correspondent banking | Interoperability pilots | Strong where liquidity exists | Global native | Mostly institutional corridors |
| Monetary-policy link | Direct central-bank liability | Indirect via reserves and rates | Direct central-bank liability | Indirect via reserve assets | Outside the policy set | Bank money |
| AML / KYC surface | Cash thresholds | Full bank controls | Full; intermediated | Issuer + VASP regimes; Travel Rule | VASP touchpoints | Full bank AML |
| Custody risk | Theft / loss | Bank operations + insolvency | Wallet + intermediary | Keys + issuer | Keys / exchange | Bank + keys |
| Freeze / censorship | Hard offline | Legal process | Design + law | Issuer blacklist + chain controls | Hard at protocol; easier at CEX | Bank controls |
Footnote: ledger finality is not automatically commercial-law finality. Scores and labels are pedagogical, not investment, legal, or product recommendations.
How to read the table
- Liability first: ask who owes you and under which insolvency regime.
- Finality has two layers: chain confirmation does not by itself discharge an off-chain legal obligation.
- Par is a design goal: stablecoin redemption depends on reserves, attestations, liquidity, and issuer solvency.
- FedNow is not a CBDC: it is U.S. bank real-time-payments infrastructure.
- Programmability is dual-use: it can support escrow and atomic delivery versus payment, but also allowlists, freezes, or governance failure.
A neutral rail checklist
- 1. Stable unit? Compare fiat deposits, CBDCs where available, and regulated payment stablecoins—not native BTC or ETH for short-term pricing.
- 2. Open composability? Public-chain rails offer it with chain, issuer, and protocol risks.
- 3. Bank claim? A commercial-bank or tokenized deposit is a different claim from a payment stablecoin.
- 4. Cross-border liquidity? Compare available stablecoin corridors, correspondent banking, and still-developing wholesale CBDC pilots.
- 5. Compliance posture? Identity, Travel Rule, KYC, and licensing obligations vary by rail and jurisdiction.
Custody is a separate decision
| Model | Who holds the key or claim? | Primary failure mode |
|---|---|---|
| Self-custody wallet | User | Key loss or phishing |
| Exchange / CASP | Platform | Hack, insolvency, or freeze |
| Qualified custodian | Trust company or bank | Operations risk; bankruptcy remoteness varies |
| ETF wrapper | Custodian for the trust | Tracking error or premium / discount |
| Bank deposit | Bank | Bank failure within insurance limits |
| Stablecoin in a wallet | User keys + issuer reserves | Depeg, freeze, or reserve opacity |