Piero Cipollone: Sparking the transformation of finance - tokenisation and the role of central banks
Keynote address by Mr Piero Cipollone, Member of the Executive Board of the European Central Bank, at the 24th Annual Symposium "Building the financial system of the 21st century: an agenda for Europe and the United States", hosted by the Harvard Law School and the Program on International Financial Systems, Washington DC, 15 April 2026.
Today I will discuss the role of technology in the future of finance. I will seek to outline the conditions needed for technological innovations to genuinely enhance the economic efficiency of the financial system, focusing on tokenisation and distributed ledger technology (DLT) as a case in point.
Financial innovation should help capital find its most productive use and risk find its best owner at the lowest possible cost. These efficiency criteria have been used to justify and judge every major wave of innovation in modern finance, from the development of derivatives markets to electronic trading and dematerialisation. The distributional effects of innovation also need to be taken into account – that is, whether the gains from innovation are passed on to borrowers and savers or absorbed along the way.
The historical record on this is striking and should make us pause for thought.
Since the late 19th century, the financial sector has expanded enormously and technology has made markets more efficient. Yet the cost of connecting a borrower to a saver has barely moved at the aggregate level. The unit cost of financial intermediation in the United States has remained roughly constant, at around 2% of intermediated assets. These estimates also broadly hold for European countries such as Germany, France and the United Kingdom.
So the question I would like to address today is whether tokenisation can break with the historical pattern, allowing technical efficiency gains to reach borrowers and savers. I will argue that this is possible because, with tokenisation, we now have a technology that is genuinely different from what came before. It is possible but by no means certain. I will therefore outline the conditions that are necessary to achieve such a positive outcome, including the role that central banks can play in enabling this transformation.