Fiat money token or tokenised fiat moneyA token is a customer deposit at a bank that is digitally represented by a token. A token, in turn, is stored on a decentralised platform and represents an asset, property or economic good. In contrast to e-money (e.g. prepaid credit cards, PayPal or cash cards), which require 100 per cent coverage, a fiat money token does not have to be fully covered.

A fiat money token could be issued on a distributed ledger platform (see distributed ledger technology). It could be used to implement programmable money that would enable fully automated payment processes through the use of smart contracts. Use cases would include machine-to-machine (M2M) payments or pay-per-use.

Certain standardisation measures are required to ensure that the bank money token is identical and interchangeable between different issuing banks. (Publication date 25/08/2021)

See also Presentation on the online discussion round "Digital Euro" from 12 April 2021, page 17-20 resp. Die Deutsche Kreditwirtschaft (2021), Europe needs new money - The ecosystem of CBDC, fiat money token and trigger solution