Reference for all key concepts
clearly defined, concise, cross‑linked
Regulatory framework to prevent money laundering and terrorist financing. Requires identification of customers, risk‑based monitoring and reporting of suspicious activity. AML obligations impact speed, documentation effort and, in some cases, the routing of cross‑border payments.
Token whose value refers to a basket of assets (for example currencies and short‑term instruments) rather than to a single fiat currency 1:1. Under MiCAR, asset‑referenced tokens are subject to stricter governance, disclosure and supervisory requirements; transparency on composition and risk is key for corporates.
German foreign‑trade regulation requiring certain cross‑border payments, typically above €12,500, to be reported electronically to the Bundesbank for statistical purposes. It is not a tax procedure, but companies must ensure relevant payments are detected and reported in time.
Online tool that allows inspection of blockchain transactions, addresses and blocks. It improves traceability (for example for payment hashes in documentation) and supports audits. Public visibility of addresses can reveal business relationships and should be considered when designing processes.
A specific form of Distributed Ledger Technology (DLT) where transactions are stored in chronologically linked blocks. Public blockchains (e.g. Ethereum) are transparent and open; private/permissioned blockchains are controlled by defined participants. Relevant for corporates for tokenization, smart contracts and traceable audit trails.
Digital central bank money – money issued directly by a central bank but in digital, tokenized or electronic form. A digital euro would be a CBDC. Unlike tokenized deposits (commercial bank money) or stablecoins (e-money), this is central bank money with the highest level of finality.
Unique identifier for a blockchain network. Using the wrong network can lead to loss of funds or tokens that do not exist in the target environment. Corporates should only use networks with sufficient availability, support and liquidity and document network and token configuration clearly.
Technology for decentrally maintained, distributed databases where transactions are synchronized and validated across multiple nodes. Blockchain is a specific form of DLT. Relevant in corporate context for tokenized assets, smart contracts and programmable payment flows.
A token regulated under MiCAR that represents e-money and is pegged to a fiat currency (e.g. euro). EMT may in principle only be issued by credit institutions or e-money institutions. Clear rules apply regarding redemption rights, reserves, governance and reporting. Typical example: regulated euro stablecoins.
Integrated enterprise software for managing business processes such as finance, procurement, production, inventory and HR. Modern ERP systems can be connected via APIs to payment providers, stablecoin platforms or DLT infrastructures to automate payment flows and simplify reconciliation.
Custodial holding of assets until predefined conditions are met. On‑chain, escrow can be implemented via smart contracts; off‑chain via trustees. The mechanism reduces counterparty risk and allows payments to be tied closely to delivery or performance evidence.
Indian foreign‑exchange law governing purpose codes, permitted transaction types and documentation. Cross‑border payments to Indian recipients must be classified and documented correctly to avoid delays or rejections.
Currency conversion between, for example, EUR and INR. Pricing usually includes a spread over reference rates. Besides explicit fees, the spread is often the largest hidden cost; corporates should always look at the all‑in rate (fee plus spread).
Transaction fee in a blockchain network. It depends on network congestion and transaction complexity. For corporates the relevant metric is the all‑in cost: network fee plus provider fees and any FX spreads.
Tamper‑resistant hardware device for secure key generation, storage and signing. In corporate settings it enables high‑security approvals and auditability and is usually combined with role‑ and approval concepts.
Modern financial messaging standard that gradually replaces legacy MT formats and enables richer structured payment data, improving reconciliation and automation, especially in cross‑border processing.
Processes to identify customers and beneficial owners and to screen them against sanctions and PEP lists. Depending on risk and thresholds, regular updates and additional documentation are required. Without sufficient KYC, account opening, limits or on/off‑ramp access may be restricted.
EU regulatory framework for crypto‑assets, including e‑money tokens (EMT) and asset‑referenced tokens (ART). MiCAR defines licensing, reserve requirements, whitepapers, governance, disclosures and supervision. For corporates it provides orientation on which stablecoins are regulated and under what conditions they can be used.
Wallet approach where signing power is split across multiple key shares that jointly sign without ever reconstructing a full key in one place. This reduces single‑point‑of‑failure risk and allows flexible approval policies, but governance and resilience of the shares remain critical.
Scheme where M‑of‑N signatures are required to authorise a transaction. Depending on the blockchain, multisig is native or implemented via smart contracts. It is easy to understand but less flexible than MPC; the choice of M/N is important for security and operations.
Indian payment rails: NEFT processes transfers in batches; RTGS provides real‑time gross settlement for larger amounts; IMPS enables near‑real‑time payments, often 24/7, typically for smaller values. Choice depends on amount, urgency and bank connectivity.
Correspondent bank accounts that banks hold for each other when they have no direct relationship. Nostro means "our account with you", Vostro "your account with us". They are key building blocks in cross‑border payment chains and influence timing, fees and transparency.
On‑ramps convert fiat into tokens (for example stablecoins), off‑ramps convert tokens back into fiat. Quality criteria include KYC/AML processes, liquidity, fee structure, local regulation and reliability of payout rails. Corporates need clear receipts, references and proven operational track records.
Fee‑sharing options in cross‑border payments: OUR (sender bears all fees), SHA (shared) and BEN (beneficiary pays). The choice affects the net amount received and sometimes the routing via intermediaries.
Evidence that an issuer or service provider holds sufficient reserves backing its obligations. Often implemented as point‑in‑time attestations; without information on liabilities the statement is limited. Corporates should look at audit standard, frequency and independence.
Real‑time credit transfer scheme in the euro area. Credits are usually executed within seconds; limits and reachability depend on the bank. For treasury it enables rapid account consolidation and smooth on/off‑ramp processes.
The final completion of a transaction – the point at which a payment becomes irrevocable and takes effect on the balance sheet. In traditional payment systems, settlement often occurs with a delay (T+1, T+2); in DLT environments, settlement can occur in real-time (T+0) or near real-time. Critical for corporates for liquidity planning and risk management.
Point at which a payment becomes legally and technically irrevocable. Card payments may still be charged back under certain rules; bank transfers may be recalled depending on status and banks involved. On‑chain transactions are usually final after confirmation; corrections happen only via new offsetting transactions.
Digital tokens designed to track the value of a reference currency (such as EUR or USD). Benefits for corporates include 24/7 availability, fast final settlement and the ability to encode process logic (approvals, escrow, micro‑settlement). Quality depends on issuer, reserve model, regulation and network risk.
Global network and standard for secure messaging between financial institutions. SWIFT does not move money itself but transports standardised payment and status messages. With gpi it has improved tracking and transparency of cross‑border payments, while intermediaries remain involved.
Framework by SWIFT to speed up and improve tracking of cross‑border payments in the correspondent‑bank model. It introduces end‑to‑end references, status tracking and more transparency on fees and timing, but does not remove all intermediaries.
Short‑hand for settlement dates relative to trade date T: T+0 (same‑day finality), T+1 or T+2 (next or second business day). For CFOs these are key to realistic cash‑flow, discount and risk planning.
A tokenized claim on a bank deposit (balance) at a specific commercial bank. The token is digital proof that a certain amount is held as a deposit and can be converted back into traditional bank money according to the bank's rules. Unlike stablecoins, this is commercial bank money, not e-money.
Requirement for virtual asset service providers to transmit and verify sender and receiver information with transfers. In the EU it is linked to the Transfer of Funds framework. Corporates should clarify with providers which data is required and how it is transmitted securely.
Software or hardware that manages private keys used to sign blockchain transactions. Tokens remain on‑chain; the wallet controls access. One distinguishes self‑custody (company holds keys) and custodial models (regulated provider holds keys). Hot wallets (online) and cold wallets (offline/HSM/hardware) are typically combined in a tiered model. For CFOs, clear roles and approvals, recovery concepts, address whitelists and logging are essential.