A blueprint for the future monetary system

Throughout history, innovations in monetary arrangements have coincided with dramatic spurts of growth in trade and commerce. Tokenisation could be the next big leap in the continued development of the monetary and financial system, enabling new types of economic arrangements that are currently not practicable due to incentive and information frictions. A unified ledger that provides tokenised central bank digital currencies in the same venue as tokenised deposits and other tokenised claims is the most promising way to harness the potential of tokenisation while preserving the singleness of money and enhancing the functioning of the current two-tier monetary system.