Glossary of rules and use-case terms

A

AML (anti-money laundering)

Laws and procedures that require certain businesses to identify their customers, monitor activity and report suspicious transactions to the authorities. Read more

AMLA

The EU Anti-Money Laundering Authority, established in 2024 and based in Frankfurt, which coordinates national supervisors and is set to supervise some high-risk cross-border firms directly. Read more

AMLR

The EU Anti-Money Laundering Regulation (EU) 2024/1624, a single rulebook that replaces much of the earlier directive-based approach and lists crypto-asset service providers among obliged entities. Read more

Anchoring (hash anchoring)

Recording only the fingerprint (hash) of a document or database on a ledger, so that any later change to the original can be detected without publishing the content. Read more

Asset-referenced token (ART)

Under MiCA, a crypto-asset that aims to keep a stable value by referring to another value or right, or a combination — for example a basket of currencies or commodities. Read more

C

CASP (crypto-asset service provider)

The MiCA term for a business that provides services such as custody, operating a trading platform, exchange, execution or transfer of crypto-assets for clients. CASPs need authorisation in the EU. Read more

CBDC (central bank digital currency)

A digital form of a country's currency issued by its central bank. Many designs studied by central banks do not rely on a public blockchain.

Crypto-asset

In MiCA, a digital representation of a value or a right that can be transferred and stored electronically using distributed ledger technology or similar technology. Read more

Custody

Holding crypto-assets, or the means of access to them such as private keys, on behalf of clients. In most regimes it is a regulated activity.

D

Decentralised identifier (DID)

A W3C-standardised identifier that its holder can control without a central registry, used to look up keys for verifying credentials. Read more

Digital product passport

An EU concept under product-sustainability law: a digital record of a product's origin, materials and repair information, accessible through a data carrier such as a QR code. It does not require a blockchain. Read more

DLT (distributed ledger technology)

Technology for keeping a shared record in many synchronised copies across participants. A blockchain is one kind of DLT.

DLT Pilot Regime

EU Regulation (EU) 2022/858, which lets authorised market infrastructures test trading and settlement of tokenised financial instruments on DLT under temporary exemptions. Read more

E

E-money token (EMT)

Under MiCA, a crypto-asset that aims to keep a stable value by referring to a single official currency. Only credit institutions and e-money institutions may issue EMTs in the EU. Read more

eIDAS 2.0

The revised EU framework for electronic identification and trust services, Regulation (EU) 2024/1183, which introduces European Digital Identity Wallets. Read more

Electronic transferable record

An electronic equivalent of a paper document whose possession carries rights, such as a bill of lading. Legal recognition, not technology, is what makes it work. Read more

F

FATF

The Financial Action Task Force, the intergovernmental body that sets global anti-money laundering standards, including those for virtual assets and their service providers. Read more

Financial promotion (UK)

Under UK law, an invitation or inducement to engage in financial activity. Since October 2023, promotions of qualifying cryptoassets fall within this regime. Read more

G

Guarantee of origin

An electronic certificate that proves to an energy customer that a given amount of energy came from renewable sources. EU member states must issue them on request. Read more

H

Hash

A fixed-length fingerprint calculated from data. Any change to the data produces a completely different hash, which is why hashes are used to detect tampering. Read more

K

KYC (know your customer)

The checks a regulated business performs to verify who its customers are, part of anti-money laundering obligations.

L

Licence and registration

Two different levels of oversight. Registration often covers anti-money laundering only; a licence or authorisation usually involves broader conduct and prudential rules. Read more

M

MiCA

The EU Markets in Crypto-Assets Regulation (EU) 2023/1114, which sets rules for issuing crypto-assets to the public and for crypto-asset service providers across the EU. Read more

O

Off-chain storage

Keeping data in an ordinary database or file store and putting only references or hashes on the ledger. It is the usual approach for personal or confidential data. Read more

Oracle

A service that brings outside information — a sensor reading, an inspection result, a delivery event — into a ledger or smart contract. The ledger cannot check whether that information is true. Read more

P

Passporting

The right of a firm authorised in one EU member state to provide services in others. MiCA gives authorised CASPs this right. Read more

Permissioned ledger

A ledger where only approved participants can write, and sometimes read, entries. Most public-sector and supply-chain pilots use this model.

Permissionless ledger

A ledger that anyone can read and anyone can join as a participant under the protocol rules, without approval from an operator.

R

Regulatory sandbox

A framework in which a supervisor lets firms test new products under supervision, sometimes with temporary relief from certain requirements.

Reverse solicitation

Under MiCA, the narrow situation in which a client in the EU approaches a non-EU firm entirely on their own initiative. It is interpreted strictly and is not a general exemption. Read more

S

Selective disclosure

Revealing only part of a credential — for example that a person is over 18 — without showing the rest, such as the full date of birth. Read more

Self-hosted address

A crypto-asset address controlled by the user's own software or device rather than by a service provider. Also called an unhosted wallet. Read more

Smart contract

A program stored on a ledger that runs automatically when certain transactions are sent to it. It is code, not a legal contract.

Stablecoin

A crypto-asset designed to keep a steady value against a reference such as a national currency. MiCA divides them into e-money tokens and asset-referenced tokens. Read more

T

Timestamp

Evidence that a piece of data existed at a given time. It can come from a trusted timestamping authority or from anchoring a hash on a ledger. Read more

Tokenisation

Representing a right or an asset — such as a bond, a share or a warehouse receipt — as a digital token on a ledger. The legal rights still depend on the law that governs the asset. Read more

Travel rule

A requirement for service providers to send identifying information about the originator and beneficiary along with a transfer, as banks do for wire transfers. Read more

V

VASP (virtual asset service provider)

The FATF term for a business that exchanges, transfers, safekeeps or administers virtual assets for others. Broadly comparable to a CASP under MiCA. Read more

Verifiable credential

A tamper-evident digital statement — such as a diploma or a licence — issued by one party about another, which a third party can check cryptographically. Defined by a W3C data model. Read more

W

Warning list

A list published by a supervisor of firms that appear to operate without authorisation, or that impersonate authorised firms.

White paper (crypto-asset)

Under MiCA, the disclosure document an offeror must publish before offering a crypto-asset to the public, describing the project, the rights attached and the risks. Read more

Z

Zero-knowledge proof

A cryptographic method for proving that a statement is true without revealing the underlying data. It is studied for privacy-preserving identity checks. Read more

Definitions are simplified for education. Legal definitions in the laws themselves take precedence. Overview for education, not legal advice. Rules change — check the official sources. Last reviewed 20 October 2026.