Money
Definition:
Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given context.
Details:
The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment.
Money evolved over time from shells and stones, to metal coins, then to banknotes and now digital tokens.
In modern times there are two distinct categories of money:
“Claim-based” => Money is moved by transferring a claim on value recorded somewhere (ledger)
“Object-based” => Transaction is settled immediately if the parties deem the object to be valid. No exchange of information is necessary
This two categories can be further devided in subclasses as detailed in this IMF diagram.
Note:
This is a series of posts with definitions for the jargon used in #banking, #fintech and #payments.
Too many people use some terms without understanding them beyond the definition.
Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking, #fintech and #payments.