Next-generation monetary and financial system takes shape, based on a tokenised unified ledger: BIS
- Building on the proposal for a unified ledger, the "trilogy" of tokenised central bank reserves, commercial bank money and government bonds is the next logical step to deliver profound change for the financial system.
- Tokenisation can enhance efficiency and open new possibilities in cross-border payments, securities markets and beyond, while maintaining the key principles of sound money: singleness, elasticity and integrity.
- Stablecoins as a form of sound money fall short, and without regulation pose a risk to financial stability and monetary sovereignty.
A tokenised unified ledger incorporating central bank money, commercial bank deposits and government bonds will lay the foundations of a tokenised monetary and financial system based on the time-tested principles of sound money, the Bank for International Settlements said today, as it called on central banks and public authorities to pave the way for this next phase.
A special chapter of the BIS's Annual Economic Report 2025 builds on the principles of the unified ledger by laying out a more detailed blueprint for how this concept can combine the "trilogy" of tokenised central bank reserves, tokenised commercial bank money and tokenised government bonds, while maintaining the core elements of a sound monetary system based on trust in central bank money.
Tokenisation – the digital representation of assets on programmable platforms – integrates messaging, reconciliation and settlement into a single seamless operation, and can transform cross-border payments and securities markets, ushering in a new era for the financial system.
Tokenisation of deposits and central bank money means that both the primary means of payment as well as the settlement function of central bank money can be integrated seamlessly on the same programmable platform. It has the potential to transform securities markets and its application to correspondent banking is especially promising.
While stablecoins may eventually play a subsidiary role in the hinterland of the financial system if adequately regulated, they do not deliver singleness of money (acceptance for payment at par), elasticity (timely discharge of obligations, preventing gridlock) and integrity (safeguarding against financial crime). Therefore, besides acting as a gateway to the crypto ecosystem, their future role is unclear.
The next-generation monetary and financial system combines the time-tested principles of trust in money underpinned by central banks with the functionality unlocked by tokenisation. This system is poised to deliver substantial improvements to current practices and to enable entirely new economic arrangements. Realising the full potential of the system requires bold actions by central banks, which need to work in partnership with the private sector and other public authorities.
The BIS and central banks are already driving this vision with Project Agorá, a collaboration led by the BIS with seven central banks and 43 private sector institutions.
The BIS is not just theorising, it is working with central banks to test and develop tokenisation as the backbone of the future monetary and financial system. The BIS Innovation Hub's Project Agorá harnesses tokenisation to improve cross-border payments in the banking system and make them seamless, more efficient and cost-effective. Project Pine explores how central banks can implement monetary policy operations in a tokenised world.
Note to editors:
- The full BIS Annual Economic Report 2025 and the BIS Annual Report 2024/25 will be published on 29 June.