A unit of programmable money is two things stacked together: a token on a ledger, and a legal claim that token represents. The previous lesson made the case that money is a ledger entry. This one is about the claim. Get the claim wrong and you build the right plumbing for the wrong instrument, then discover at launch that you cannot issue it, cannot pay yield on it, or owe a redemption you did not budget for.
There are four broad shapes in the wild. They share a UX and diverge on the things that actually constrain a build: who is allowed to issue, what backs the unit, and what you owe the holder on demand.
Why the wrapper, not the chain, is the constraint
The chain decides settlement mechanics. The wrapper decides legality and economics. Two tokens can run on the same network, redeem one-for-one to a dollar, and still sit in different regulatory regimes with different issuers and different rights.
When you scope a product, the wrapper answers the questions that gate everything downstream. Do I need a banking charter or a payment institution license. Can I pay holders interest. Is my reserve a segregated pool of Treasuries or a line on a bank's balance sheet. Treat the wrapper as the spec, not a compliance afterthought.
Animal one: the payment stablecoin
A payment stablecoin is a token backed by a dedicated reserve and redeemable for a fixed amount of monetary value, issued by an entity that is neither the central bank nor, necessarily, your deposit-taking bank. In the US, the GENIUS Act, signed into law on July 18, 2025, defines this category and restricts issuance to permitted payment stablecoin issuers: bank subsidiaries, OCC-supervised nonbanks, and approved state-chartered entities.
The reserve rules are specific. Backing must be at least 1:1 in high-quality liquid assets: US currency, insured bank deposits, short-term Treasuries, and overnight Treasury repo. Private credit is off the table, and reserve composition has to be disclosed monthly.
The constraint that surprises teams: under GENIUS, issuers cannot pay holders yield or interest on the stablecoin. The float economics accrue to the issuer, not the holder, by law. If your business model assumed paying users for parking dollars in your token, that model does not survive contact with the statute.
Animal two: the tokenized deposit
A tokenized deposit is an ordinary commercial bank deposit recorded as a transferable token, rather than as a line in a single bank's internal ledger. The claim is on the issuing bank's balance sheet, carries the same credit risk as any deposit at that bank, and gets the same accounting and regulatory treatment.
The mechanic is a lock-and-mint against a real liability. When a customer moves money on-chain, the bank earmarks the deposit and issues an equivalent token; on redemption the bank burns the token and credits the account. The bank's ledger and the chain stay reconciled, so the token is always one-for-one with a deposit that already exists.
JPMorgan's deposit token, JPMD, went into institutional rollout on Coinbase's Base network on November 12, 2025, through its Kinexys unit. The money never leaves the bank's books; the token is just a faster way to move the existing claim. That is the practical difference from a stablecoin: a stablecoin holder owns a slice of a segregated reserve pool, while a tokenized-deposit holder owns a bank deposit that happens to be on a ledger.
Animal three: the e-money token
E-money tokens are the European framing of the single-currency stablecoin, defined under the EU's Markets in Crypto-Assets regulation (MiCA). An EMT references one official currency and must be redeemable at par, on demand, at any time, in that currency. Issuance is limited to authorized credit institutions or e-money institutions.
MiCA also defines a sibling, the asset-referenced token (ART), which references a basket of currencies, commodities, or other assets. The redemption right is weaker: an ART holder redeems at the current market value of the reserve assets, not at a guaranteed par. That single difference, par versus market value, changes the risk you carry and the product you can honestly market.
EMT reserves carry placement rules too. For a non-significant EMT, at least 30 percent of the reserve must sit as deposits at credit institutions, rising to 60 percent once a token is designated significant.
A worked example
Say you want to ship a euro token for in-app payments across the EU. As an EMT, you need a credit-institution or e-money-institution authorization, you owe par redemption on demand, and you face the 30/60 percent deposit-placement floor. Try to dodge that by pegging to a small basket of euro and dollar instead, and you have built an ART: looser placement framing, but now you owe redemption at fluctuating market value, which is a worse promise to a payments user who expects a stable euro. The wrapper, not the code, just decided your license, your reserve location, and what you can tell the user their balance is worth.
Animal four: the CBDC
A central bank digital currency is a direct liability of the central bank, not of a commercial bank or a private issuer. It carries no commercial credit risk because the claim is on the monetary authority itself, and a retail CBDC is generally framed as legal tender.
This is the cleanest claim of the four and the least available to builders. As of mid-2025 no major economy had launched a retail CBDC, and the Federal Reserve halted retail CBDC work following a 2025 executive order. Treat a domestic retail CBDC as a design assumption to watch, not a rail you can build on this year. Wholesale CBDC experiments are a separate track and move on their own timeline.
The takeaway
These four animals can present an identical balance to the same wallet, and that is exactly the trap. The questions that decide your product live in the wrapper: who is the obligor, what is the reserve, is redemption at par or at market, and can you pay yield. A US payment stablecoin and a tokenized deposit both move a dollar on-chain, but one is a claim on a segregated reserve with a yield ban, and the other is a claim on a bank's balance sheet with the bank's credit risk attached. Name the animal before you scope the build. The later lessons on reserves, redemption, and the regulatory wrappers only make sense once you know which one you are holding.