AML

Anti-money-laundering rules and procedures.

Asset-referenced token (ART)

Under MiCA, a crypto asset that references several currencies, commodities or other assets.

Bail-in

The write-down or conversion of a failing bank's liabilities, including depositors' balances above the guaranteed amount, to absorb losses.

Bank money

A balance held at a commercial bank; legally a claim against the bank, not the same thing as cash.

Blockchain

A distributed ledger in which transactions are recorded in cryptographically linked blocks maintained by a network of nodes.

Bridge

A service or protocol for moving assets, or representations of them, between blockchains.

Cantillon effect

The observation that newly created money benefits those who receive it first, changing relative prices and the distribution of wealth.

Capital controls

Government restrictions on moving money across borders or withdrawing it from banks.

CASP

Crypto-asset service provider: the MiCA category for exchanges, brokers, custodians and similar services, subject to authorisation and listed in the public register.

CBDC

Central bank digital currency: a digital form of central bank money for the public, such as the planned digital euro.

Central bank money

Cash and the reserves that banks hold at the central bank; the only money that is not a claim against a private institution.

CEX / DEX

Centralised exchange: operated by a company that holds customer funds. Decentralised exchange: a protocol that trades without central custody.

Coin

The native asset of its own blockchain, such as BTC on Bitcoin.

Cold storage

Custody in which private keys never touch an internet-connected device.

Confidence label

An indication of how well a rating value is supported by sources: high, medium, low or estimate.

Consensus

The procedure by which a decentralised network agrees on the valid state of the ledger.

Control (criterion)

The degree to which the user, rather than an issuer, provider or authority, holds ultimate power over their assets: freeze risk, withdrawal, self-custody.

Custodial wallet

A wallet in which a provider holds the keys on the user's behalf; the user holds a claim, not the keys.

DeFi

Decentralised finance: financial applications executed mainly through smart contracts.

Denominator

The unit in which a price is expressed; the same asset history looks different in EUR, USD, gold or Bitcoin.

Drawdown

The decline from a peak to a subsequent trough; a measure of the downside experienced.

DXY

An index of the US dollar against a basket of major currencies, widely used as a gauge of dollar strength.

E-money token (EMT)

Under MiCA, a crypto asset that references one official currency and is issued by an authorised issuer; the regulatory category for euro and dollar stablecoins in the EU.

ETF / ETP

Exchange-traded funds and products that give exposure to an asset through a traditional brokerage account.

Fiat currency

State-issued money that is legal tender by law and not redeemable for a commodity, such as the euro or the US dollar.

Finality

The point from which a transaction is considered practically or technically irreversible.

Fork

A split or rule change in a blockchain protocol.

Frontier

The best value measured for a criterion within a product category, shown next to each rating so that absolute and relative quality stay distinguishable.

Gas fee

The fee paid to execute a transaction or contract operation on certain networks.

Halving

The periodic halving of Bitcoin's block subsidy, which fixes its issuance schedule.

Hardware wallet

A dedicated physical device that keeps private keys isolated from internet-connected computers.

Hash

A fixed-length cryptographic fingerprint of data.

Holding period

The length of time an asset is held, which in some jurisdictions determines whether or how a gain is taxed.

Inflation

A sustained rise in the general price level; equivalently, a fall in the purchasing power of money.

KYC

Know your customer: identity verification by a regulated service provider.

Layer 1 / Layer 2

The base blockchain and the scaling or execution layers built on top of it, such as Lightning on Bitcoin or rollups on Ethereum.

Lightning Network

A layer-2 payment network for fast, low-cost Bitcoin transactions.

Liquidity (macro)

The availability of money and credit in an economy or market, as distinct from the market liquidity of a single asset.

Liquidity (market)

The ability to buy or sell an asset in size without moving its price much.

Market capitalisation

Price per unit multiplied by circulating supply; a measure of size, not of liquidity or quality.

MiCA

The EU Markets in Crypto-Assets Regulation: the harmonised framework for crypto assets and their service providers in the EU.

Mining

The use of computing power to produce blocks and secure a proof-of-work network, rewarded with newly issued coins and fees.

Money supply (M1, M2, M3)

Measures of how much money exists in an economy, from cash and sight deposits (M1) to broader liquid instruments (M3); definitions differ by currency area.

Multisig

A setup that requires several keys to authorise a transaction, spreading risk across devices or people.

Node

A computer that stores, verifies and relays a network's data according to the protocol rules.

Non-custodial / self-custody

Custody in which the user controls the keys directly, without an intermediary.

On-ramp / off-ramp

The route from fiat money into crypto, and back.

Order book

The list of open buy and sell orders on an exchange.

Passphrase

An additional secret combined with a seed phrase to derive a separate set of keys.

Peg / depeg

The intended link of a stablecoin to its reference value, and its breakdown.

Policy rate

The interest rate a central bank sets for lending to or accepting deposits from banks; the anchor of all other rates in a currency.

Private key

The secret cryptographic key that controls assets on a blockchain; whoever holds it holds the assets.

Proof of Stake

A consensus mechanism in which staked assets are the basis for validating blocks and securing the network.

Proof of Work

A consensus mechanism in which computational work secures the network and produces blocks.

Public key / address

The publicly shareable counterpart to a private key, used to receive funds.

Purchasing power

What a unit of money actually buys; the quantity that inflation erodes.

Quantitative easing / tightening

A central bank's expansion or contraction of its balance sheet by buying or selling securities, changing the reserves in the banking system.

Real interest rate

A nominal interest rate minus inflation; positive when saving in a currency gains purchasing power, negative when it loses.

Reserve

The assets backing a stablecoin, held by its issuer.

Seed phrase

A sequence of words from which a wallet's keys can be restored; the master backup.

Slippage

The difference between the expected and the executed price, usually caused by low liquidity or large orders.

Smart contract

Program code on a blockchain that executes defined rules automatically.

Social recovery

A recovery method in which designated contacts or devices can help restore access without a single seed phrase.

Spread

The difference between the best buy and sell prices.

Stablecoin

A crypto asset designed to hold a stable value against a reference such as the US dollar or the euro.

Staking

Locking assets to participate in validation on a proof-of-stake network, usually for a reward.

Taxable event

An action, such as a disposal, swap or receipt of rewards, that triggers a tax consequence under a country's rules.

Term premium

The extra yield investors demand to hold a long-term bond rather than rolling over short-term ones.

Token

A digital asset issued on an existing blockchain, such as an ERC-20 token on Ethereum.

Tokenomics

The economic rules of a token: supply, issuance, distribution and incentives.

Travel Rule

The requirement that sender and recipient data accompany regulated crypto transfers; relevant when withdrawing from a licensed provider to self-custody.

UTXO

Unspent transaction output: the accounting model Bitcoin uses to track who can spend what.

Volatility

The intensity of price fluctuation over time.

Wallet

Software, hardware or a procedure for managing keys and interacting with blockchain assets; a wallet holds keys, not coins.

Whale

A holder of a very large amount of an asset, whose actions can move the market.

Yield curve

The relationship between bond yields and their maturities for one issuer; its shape reflects expectations about growth, inflation and policy.

Zero knowledge

Cryptographic methods that prove a statement without revealing the underlying information.