Credit and Defunding: Difference between pages

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1. In relation to a bank account, a credit balance in the bank's books is one which stands in favour of the customer.  The bank owes money to the customer.  (Contrasted with a debit, or overdrawn, balance.)
''Accounts - digital wallets.''


2. An item paid into an account.
Withdrawing money or other assets from an account or digital wallet.


3. Borrowings, especially short term ones relating to particular goods or services.  So an entity which lends money, or which provides goods or services on deferred payment terms, is 'extending credit' to its customer.


4. Credit strength, or creditworthiness, means an entity's capacity and willingness to meet its financial obligations.
:<span style="color:#4B0082">'''''Seamless funding and defunding experience essential to digital euro'''''</span>


5. In double entry book-keeping, every accounting transaction is recorded with both a Debit entry and a Credit entry in the accounting records. 
:"Funding and defunding functionalities would enable the end user to top up or withdraw digital euro holdings by transferring money from/to private money or with/into cash.  
Credit balances represent liabilities or income.
(Debit balances represent assets or expenses.)


6. (CR). In double entry book-keeping a Credit entry is one made:
:Users would either fund their digital euro holdings accounts or wallets with cash, or convert private money into digital euro (“funding”).  
- To increase a credit balance; or
- To reduce a debit balance.


For example, the book-keeping entry to recognise a cash expense is:
:Conversely, they could convert digital euro into cash or into private money (“defunding”).
DR Expense
CR Bank


If the bank balance is already overdrawn, the CR Bank accounting entry for the payment will increase the overdrawn bank balance (liability) in the balance sheet.
:A seamless funding and defunding experience is essential to support the successful uptake of the digital euro; the ease with which such functionalities could be used would significantly affect end users’ willingness to adopt a digital euro and to use it over time.  
But if the bank balance is currently an asset (DR balance in the account holder's records), the CR Bank accounting entry for the payment will reduce the positive bank balance (asset) in the balance sheet.


7. ''Tax''.
:The set of funding and defunding functionalities to be offered by supervised intermediaries would need to ensure a common baseline end user experience, irrespective of the supervised intermediary that provides them with the digital euro."
A tax credit.
 
:''Progress on the investigation phase of a digital euro - January 2023 - European Central Bank (ECB).''


8. Any amount in favour the holder of the credit, entitling them either to future goods or services without further payment (or for a reduced payment) or alternatively to a repayment in cash.


== See also ==
== See also ==
* [[Acceptance]]
* [[Account]]
* [[Cash terms]]
* [[Assets]]
* [[Credit card]]
* [[Cash]]
* [[Credit card company]]
* [[Digital euro]]
* [[Credit crunch]]
* [[Digital wallet]]
* [[Credit enhancement]]
* [[European Central Bank]] (ECB)
* [[Credit rating]]
* [[Fund]]
* [[Credit score]]
* [[Funding]]
* [[Creditworthiness]]
* [[Funds]]
* [[Daylight credit]]
* [[Intermediary]]
* [[Days sales outstanding ]]
* [[Money]]
* [[Debit]]
* [[Private money]]
* [[Double entry]]
* [[Finance ]]
* [[Letter of credit]]
* [[Net credit/debit position]]
* [[Open account]]
* [[Provisional credit]]
* [[Tax credit]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]
[[Category:Technology]]

Latest revision as of 14:52, 18 March 2023

Accounts - digital wallets.

Withdrawing money or other assets from an account or digital wallet.


Seamless funding and defunding experience essential to digital euro
"Funding and defunding functionalities would enable the end user to top up or withdraw digital euro holdings by transferring money from/to private money or with/into cash.
Users would either fund their digital euro holdings accounts or wallets with cash, or convert private money into digital euro (“funding”).
Conversely, they could convert digital euro into cash or into private money (“defunding”).
A seamless funding and defunding experience is essential to support the successful uptake of the digital euro; the ease with which such functionalities could be used would significantly affect end users’ willingness to adopt a digital euro and to use it over time.
The set of funding and defunding functionalities to be offered by supervised intermediaries would need to ensure a common baseline end user experience, irrespective of the supervised intermediary that provides them with the digital euro."
Progress on the investigation phase of a digital euro - January 2023 - European Central Bank (ECB).


See also

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