BISness Podcast - A Primer on Tokenisation

Why It Matters

If broadly adopted, tokenization could cut costs, accelerate settlement, broaden market access and create novel financial products—forcing regulators and central banks to adapt frameworks for trust, security and monetary settlement. Adoption decisions and platform design will shape systemic risk, market structure and the future role of central banks.

Summary

Tokenization is the digital representation of financial assets on programmable platforms—often distributed ledgers—that embed ownership records and automated rules governing transfers. BIS speakers stress the technology remains nascent but could reshape how assets are issued, traded, settled and owned by enabling automation (eg, atomic settlement), eliminating reconciliation and unlocking new economic use cases. They distinguish tokenized assets (claims backed by liabilities) from cryptocurrencies (network-native tokens with no issuer liability) and describe the BIS concept of a ‘unified ledger’ linking tokenized commercial and central bank money. Central banks are actively experimenting alongside the private sector, exploring programmable platforms and tokenized reserves to support settlement and new services.

Original Description

Morten Bech and Jon Frost explain the concept of tokenisation and how it can improve the international financial system.