BIS General Manager Agustin Carstens highlights the pivotal role of tokenization in transforming the traditional financial system. He emphasizes its potential to establish an interconnected global financial network through the seamless transaction of central bank digital currencies (CBDCs).
Agustin Carstens, the general manager of the Bank for International Settlements (BIS), has underscored the transformative power of tokenization in revolutionizing the existing financial framework. Speaking at the CBDC & Future Monetary System Seminar in Seoul, Carstens elucidated how tokenization enables the modernization of the currently compartmentalized financial system.
Tokenization involves representing money and assets in a digital format on a programmable ledger. This innovation facilitates the direct transfer of assets through programming instructions, eliminating the need for intermediaries like account managers. Carstens envisions a future where a “unified ledger” incorporates tokenized money and assets, fostering the evolution of the financial system.
In practical terms, this evolution entails the establishment of a two-tiered currency system, featuring wholesale tokenized CBDCs and tokenized deposits, seamlessly implemented across multiple countries. Carstens emphasizes that this transition is vital for achieving a more interconnected and programmable financial system, laying the groundwork for the widespread adoption of CBDC transactions on a global scale.