Banking and Crypto Glossary

Banking and Crypto Terms and Definitions

Learn core banking and crypto terms and definitions to help your crypto business get to the next level. Check out our banking and crypto glossary, and find related articles and resources.

#

A2A Payments

Account to Account (A2A) payments, those made directly between two bank accounts using payment networks like the Automated Clearing House (ACH) and Real-Time Payments (RTP)

#

AML (Anti-Money Laundering)

A set of laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.

#

APR (Annual Percentage Rate)

The annual rate charged for borrowing or earning through an investment, which includes all fees and costs associated with the transaction.

#

ARR (Annual Recurring Revenue)

A metric for subscription-based companies or those with recurring revenue models, measuring the predictable and recurring revenue components of the annual subscriptions.

#

Angel Investor

An affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity.

#

BIC Code

Also known as a SWIFT code, a BIC Code is a standard format of Business Identifier Codes approved by the International Organization for Standardization. It's used globally to identify banks and financial institutions in international transactions, ensuring secure and efficient processing.

#

Bank Statement

A document or electronic record provided by a bank, detailing the transactions in a customer's account over a specific period. It lists deposits, withdrawals, fees, and interest earned, serving as a tool for account holders to monitor their finances and verify account activity.

#

Banking as a Service (BaaS)

An end-to-end process that allows fintech companies and other third parties to connect with banks' systems directly via APIs to provide banking services. BaaS platforms enable businesses to offer financial services without the need to build and maintain their own banking infrastructure.

#

Bitcoin

The first decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network.

#

Blockchain

A digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.

#

Bootstrapping

A self-funding approach where a startup operates without external investment, relying on the founders' personal capital and revenue generated by the business.

#

Burn Rate

The rate at which a new company spends its venture capital to finance overhead before generating positive cash flow from operations.

#

CAC (Customer Acquisition Cost)

The cost associated with acquiring a new customer, including marketing and sales expenses. It's crucial for understanding the value of a customer and for optimizing marketing strategies.

#

Cap Table

A spreadsheet or table that shows the equity capitalization for a company, including the total market value of equity securities.

#

Central Bank Digital Currency (CBDC)

A digital form of fiat money issued and regulated by the nation's central bank.

#

Churn Rate

The percentage of customers or subscribers who cancel or do not renew their subscriptions during a given time period. A critical metric for assessing customer retention and product/service satisfaction.

#

Compliance

Adhering to laws and regulations within the industry, including those related to financial transactions, data security, and consumer protection.

#

Cryptocurrencies

A digital or virtual form of currency that uses cryptography for security and operates independently of a central bank.

#

Cryptocurrency Exchange

A platform where individuals can buy, sell, or trade cryptocurrencies.

#

DeFi

An umbrella term for various financial applications that uses cryptocurrencies and blockchain.

#

Debt Financing

Borrowing funds that must be repaid over time, with interest, used for immediate capital needs without diluting ownership.

#

Decentralized Autonomous Organization (DAO)

An organization represented by rules encoded as a computer program that is transparent, controlled by the organization members, and not influenced by a central government.

#

Derivative

A financial security with a value that is reliant upon or derived from an underlying asset or group of assets.

#

Equity Crowdfunding

A method of raising capital through the collective effort of friends, family, customers, and individual investors, typically via online platforms.

#

Equity Financing

Raising capital through the sale of shares in the company, providing investors ownership interests.

#

Fiat Currency

Currency that a government has declared to be legal tender, but it is not backed by a physical commodity.

#

Fintech

Short for financial technology, it refers to new tech that seeks to improve and automate the delivery and use of financial services.

#

Hedge Fund

An investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets, often with complex portfolio-construction and risk management techniques.

#

Intellectual Property (IP)

Legal rights to inventions, literary and artistic works, symbols, names, and images used in commerce, crucial for protecting a startup's innovations and brand.

#

Interest Rate

The amount a lender charges for the use of assets expressed as a percentage of the principal.

#

KYB (Know Your Business)

A verification process that involves validating the legitimacy and integrity of business clients and partners. Similar to KYC (Know Your Customer), KYB is crucial for assessing the risk profile of businesses, ensuring compliance with anti-money laundering regulations, and preventing fraud.

#

KYC (Know Your Customer)

The process of a business verifying the identity of its clients, typically as a part of banking and financial regulations.

#

LTV (Lifetime Value)

The total revenue a business can reasonably expect from a single customer account throughout the business relationship. It helps companies in decision-making regarding sales, marketing, product development, and customer support.

#

MVP (Minimum Viable Product)

The most basic version of a product that can be released to early customers to validate a business concept.

#

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

#

NFTs

Unique digital assets that represent internet collectibles like art, music, and games with an authentic certificate created by blockchain technology.

#

Pivot

A strategic shift in business model or product offering, often based on feedback or market research, to better align with market needs or opportunities.

#

Product Market Fit

The degree to which a product satisfies strong market demand. It's a key indicator of an early-stage company's potential for success and is often used to guide product development and marketing strategies.

#

ROI (Return on Investment)

A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.

#

Restaking

Re-staking is the latest trend for Ethereum holders. It’s a strategy that allows investors to leverage their staked Ethereum to secure additional blockchain protocols, effectively putting their assets to work twice.

#

Runway

The amount of time a company can continue to operate until it runs out of cash. Calculated by dividing current cash balances by the burn rate, it's crucial for financial planning and fundraising strategies.

#

SAFT (Simple Agreement for Future Tokens)

Stages of startup financing that provide growth capital, typically moving from early investment to more substantial rounds as the company matures.

#

SAM (Serviceable Available Market)

The segment of the TAM targeted by your products or services which is within your geographical reach.

#

SOM (Serviceable Obtainable Market)

The portion of SAM that you can capture, considering current competition, product, and market limitations.

#

SWIFT

SWIFT is crucial for international financial transactions, providing a standardized system for financial transactions and a secure communication mechanism between institutions across different countries.

#

Securities

Tradable financial assets such as bonds, stocks, or any financial instrument that holds some type of monetary value.

#

Seed capital

The initial funding that enables nascent startups to take their first concrete steps. That's the essence of seed capital.

#

Series A/B/C Funding

Stages of startup financing that provide growth capital, typically moving from early investment to more substantial rounds as the company matures.

#

Smart Contract

A self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.

#

TAM (Total Addressable Market)

The overall revenue opportunity available for a product or service, identifying the maximum market size that a business can potentially reach.

#

Token Generation Event (TGE)

An event in which a new cryptocurrency project sells part of its cryptocurrency tokens to early adopters and enthusiasts in exchange for funding.

#

Tokenomics

The study of the economics of cryptocurrencies or tokens, including factors like distribution, supply, and demand dynamics.

#

Venture Capital

A form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

#

Venture Debt

A type of debt financing provided to venture-backed companies by specialized banks or non-bank lenders.

#

Virtual Debit Card

A digital version of a traditional debit card that exists entirely in an electronic form, without a physical counterpart. Virtual debit cards are used for online transactions, providing a secure and convenient payment method.

#

Wallet (Digital Wallet/Crypto Wallet)

A device or program that allows you to store, transfer, and receive digital currency.

#

Working Capital

The measure of a company's operational liquidity, calculated as current assets minus current liabilities. It represents the funds available to a business for day-to-day operations and short-term financial obligations.
Grow With Us.
It’s time for your business to get the banking experience it deserves.
Get Started

Nordfinex UAB is a limited company registered in Lithuania under the code 306 129 193 as an operator of deposit virtual currency wallet and a virtual currency exchange operator.
‍
Payment services offered in the Nordark platform are provided by third parties, licensed to operate in all jurisdictions in which Nordark operates.

Privacy PolicyTerms & Conditions