Banking and crypto: key words
Read the word, say the meaning out loud, then open the card.
On-ramp and off-ramp
An on-ramp swaps ordinary money for crypto. An off-ramp swaps crypto back into ordinary money. Source
Virtual asset service provider (VASP)
The FATF's name for a business that, for customers, exchanges, transfers or keeps virtual assets, among other services. Source
Customer due diligence (CDD)
The checks a bank or exchange runs on a customer: who they are, who owns them, why they want the account, and ongoing monitoring. Source
Beneficial owner
For a US bank's company customer: each person who owns 25% or more of the company, plus one person who controls or manages it. Source
Correspondent banking
When one bank holds deposits for other banks and provides payment services to them. Source
De-risking
Ending or restricting relationships with whole groups of customers to avoid risk, instead of managing each customer's risk. Source
Deposit insurance
Protection for bank deposits if a bank fails. The FDIC's standard limit is $250,000 per depositor, per insured bank, for each account ownership category. Source
Uninsured deposits
Money in a bank above the deposit insurance limit. Its owner may not get it all back if the bank fails. Source
Bank run
Many depositors pulling their money out at once because they fear the bank may fail. Source
Systemic risk exception
The special decision in March 2023 that let the FDIC protect all depositors of Silicon Valley Bank and Signature Bank, insured or not. Source
Travel Rule
The FATF's wire transfer rule applied to crypto: details about the sender and receiver must pass between the providers handling a transfer. Source
Self-hosted wallet
A crypto wallet not held by a service provider for its owner. The FATF calls it an unhosted wallet; EU law calls it a self-hosted address. Source
Fedwire
The US Federal Reserve's system for large, time-critical payments between banks with a Fed account. A payment is final once processed. Source
ACH
A US network through which banks send each other batches of electronic payments, such as payroll. Source
SEPA
The Single Euro Payments Area, which lets people make euro payments across 41 European countries as easily as at home. Source
Reputation risk
The risk that something a bank does could hurt how the public sees it, for reasons not clearly tied to its financial condition. Source