The recent paper on digital assets in payments and transaction banking defines these assets as those controlled through public-private key cryptography. It differentiates between code-based (crypto) digital assets, which operate without intermediaries, and intermediary-based digital assets, where one or more intermediaries validate transfers.
The paper emphasizes that regulatory goals are best achieved by separating crypto-assets. It suggests that regulated financial intermediaries should either be crypto-asset service providers or offer other regulated financial services, but not both.
According to the paper, efficient automated processing of financial transactions can be accomplished by either replacing traditional financial assets with intermediary-based digital assets or maintaining current systems while standardizing data and processes. Application programming interfaces (APIs) can support secure automated data exchange, allowing similar outcomes to be achieved with or without digital assets.
In the context of middle-income countries, the document notes that many benefits attributed to retail financial services—such as lower cost and risk, increased speed, and enhanced transparency—are better realized with traditional financial assets. However, it acknowledges that intermediated digital assets might provide valuable reductions in cost and risk within financial markets.