Experts of the Bank for International Settlements (BIS) called tokenization based on CBDC the future of the global financial system, and cryptocurrencies are an erroneous branch of this process.
A #Unified Ledger – a new type of financial market infrastructure – can harness the benefits of tokenisation by combining #CBDC, #TokenisedDeposits and #TokenisedAssets in shared programmable platforms. #BISAnnualEconReporthttps://t.co/eKJVwQjpqJ pic.twitter.com/9VcumPPWv5
— Bank for International Settlements (@BIS_org) June 20, 2023
In the Annual Economic Report, BIS specialists noted that the previous breakthrough in the development of monetary relations was due to the appearance of financial instruments in the form of entries in accounting books. With the advent of the electronic age, they acquired a digital form, giving impetus to the “dematerialization” of money.
“Today, the monetary system is on the verge of another major breakthrough. After dematerialization and digitalization, tokenization has become a key event – the process of representing requirements in digital form on a programmable platform, ”the BIS believes.
According to experts, cryptocurrencies “gave an idea of the prospects for tokenization”, but they themselves are an erroneous system and cannot take on the role of the money of the future.
“Cryptocurrency is not only self-referential, has little contact with the real world, but also lacks an anchor of trust in central bank-provided money. At the same time, stablecoins have mushroomed to fill this vacuum,” they noted.
BIS presented a plan for the future monetary system, the key elements of which will be CBDC, tokenized deposits and other requirements for financial and real assets. It will unite all the components of a new type of financial market infrastructure – a “unified registry”. The platform can integrate multiple registries by operating in a “network of networks” mode.
“This will take full advantage of tokenization through the settlement finality that comes from central bank money. […]. Using the credibility of the Central Bank, such a joint decision has great potential to strengthen the monetary and financial system,” the institution’s experts emphasized.
In the previous annual report, BIS specialists already stated that CBDCs, and not cryptocurrencies with their systemic shortcomings, will become the basis of future innovative monetary systems.
As a reminder, according to asset management company Bernstein, over the next five years, assets worth $5 trillion can be tokenized, including 2% of the global money supply.
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