Strengthening financial governance and cooperation amid rapid technological transformation

Remarks by Mr Tao Zhang, BIS Chief Representative for Asia and the Pacific, at the 2025 Financial Street Forum, Beijing, 28 October 2025.

Remarks prepared for delivery

Introduction

Distinguished guests, colleagues and friends, it is a great honour to join you at the Financial Street Forum in Beijing. The theme of this session – governance in times of change – is both highly important and deeply relevant. In a world of rapid transformation, we are reminded that markets and economies can only flourish when there is trust. And trust, in the end, is the most valuable currency of all.

Across Asia, we have seen remarkable strides made in financial innovation – from mobile payments to new cross-border connectivity – that are reshaping the global financial landscape. China, too, has contributed important experiences in how technology and finance can be combined. This makes Beijing a highly relevant place to reflect on governance in times of change.

One year ago, in this same forum, I discussed the evolving roles of central banks in navigating macroeconomic challenges and leveraging the digital revolution to maintain financial stability.

This year, I will build on that foundation by focusing on how new technologies, such as tokenisation, can help us reform the governance of the system's core infrastructure, while upholding the timeless principles that ensure money remains stable and trustworthy.

Developments in tokenisation

One of the most notable financial developments in recent years has been the rise of tokenisation. Tokenisation allows money and assets to be represented digitally in programmable form, so that messaging, reconciliation and settlement occur as a single atomic operation.

This is no longer a distant prospect. As of mid-2025:

• More than 20 sovereigns and supranationals have already issued tokenised bonds.
• These issuances have spanned nine different currencies, with volumes exceeding $4 billion.
• The early experience shows that issuance and liquidity conditions can be broadly comparable with traditional bonds, while efficiency gains in settlement and collateral management are beginning to emerge.

Several Asian economies have been among the early movers in this field, piloting tokenised bonds and exploring new forms of faster cross-border payments.

Let me highlight two applications that illustrate the promise of tokenisation.

• First, cross-border payments. Today's transactions often rely on long chains of correspondent banks. Each link adds cost, delay and risk. With tokenisation under sound governance, transactions can flow more directly, with compliance checks embedded from the start and settlement occurring more efficiently. The outcome is faster, cheaper and safer.
• Second, securities settlement. Even in advanced economies, government bond transactions can take days to settle. Tokenisation can shorten this dramatically, freeing liquidity and reducing counterparty risk. By embedding collateral rules and payment-versus-delivery in programmable tokens, settlement can be instantaneous and automated. This shows how governance and technology, working together, can transform the backbone of the financial system.

These examples demonstrate that tokenisation is not an abstract idea. It is already reshaping how markets operate, and it carries enormous potential for the future.

Why governance is essential

But let me add a note of caution: technology alone does not guarantee stability. Without proper governance, tokenisation could create as many risks as it solves.

• Fragmentation. If countries or private actors pursue isolated solutions, we could end up with digital silos that fail to interoperate – raising costs instead of lowering them.
• Uncertainty. Without clear legal status for tokenised claims, participants may hesitate to adopt new systems, undermining trust.
• Risk migration. Operational, cyber and compliance risks may simply move into new corners of the system if governance does not adapt in a timely and consistent manner across jurisdictions.

In other words, governance is the compass that determines whether new technologies strengthen cooperation or deepen division. The challenge is not simply to innovate, but to innovate together.

Principles that must endure

This is why we must keep sight of enduring principles. Any sound monetary and financial system must satisfy what the BIS calls "the triple test":

• Singleness: all forms of money must be interchangeable at par, anchored in central bank money.
• Elasticity: liquidity must expand and contract with the needs of the economy, through central banks, banks and other financial institutions working together.
• Integrity: the system must be resilient against misuse, compliant with rules and worthy of public trust.

What central banks can do

So, what is the role of central banks in improving governance as tokenisation advances? I would highlight four responsibilities.

• First, articulate the vision. Central banks must explain clearly to markets, policymakers and the public what must be preserved and what can adapt. They must show that while technology changes the form, the essence of money – its singleness, elasticity and integrity – must remain. Clarity of vision not only guides policy but also reassures participants navigating uncertainty.
• Second, lay the legal and regulatory foundations. Innovation cannot thrive without legal certainty. Tokenised claims must be recognised in law and treated consistently across jurisdictions. Digital identity frameworks must be robust, balancing privacy with the need for oversight. Standards for interoperability, messaging and programmability must be harmonised so that national systems can connect across borders. This legal and regulatory scaffolding is what will transform isolated pilots into a coherent system.
• Third, provide the public goods. Only central banks can issue central bank money – the ultimate settlement asset that anchors the system. Beyond issuing money, they must also ensure that settlement infrastructures are resilient to shocks, inclusive of participants and open to innovation. By providing safe rails and common platforms, central banks enable the private sector to innovate on a stable foundation.
• Fourth, foster cooperation with the private sector. Most of the concrete applications will be developed by banks, financial institutions and technology providers. Central banks should not seek to crowd out this innovation. Their role is to set the guardrails, encourage experimentation under proper oversight and ensure that compliance and resilience are embedded in the design. In short, central banks must be both enablers and guardians, opening the door to new possibilities while protecting the trust that is essential for stability.

Together, these responsibilities form a governance framework that balances innovation with stability, experimentation with caution and national authority with international cooperation.

How the BIS can help

But no central bank can carry this burden alone. Because money and finance flow across borders, international cooperation is indispensable. This is where the BIS plays its part.

• Providing platforms for cooperation. Through forums such as our bimonthly meetings, regional groups and the Basel-based committees, the BIS brings together central banks from advanced and emerging market economies alike. In these settings, Governors and senior officials share perspectives, test ideas and coordinate responses. This convening power is itself a form of governance, ensuring that national reforms add up to something greater than the sum of their parts.
• Developing standards and guidance. The BIS hosts the Committee on Payments and Market Infrastructures (CPMI), which has been at the forefront of global efforts to enhance cross-border payments, harmonise messaging standards and strengthen the safety of market infrastructures. It also supports the Basel Committee on Banking Supervision and other standard setters, whose work provides the guardrails that underpin trust in the global financial system.
• Fostering practical experimentation. Through the BIS Innovation Hub, central banks and private firms jointly explore how technologies like tokenisation can be deployed in ways that are safe, resilient and interoperable. The purpose is not to prescribe a single model, but to accelerate learning, reduce duplication and help jurisdictions avoid costly mistakes.
• Contributing through research and capacity-building. Our analytical work on financial innovation helps frame the debate with rigorous evidence. Our training programmes and technical assistance spread this knowledge to central banks worldwide, ensuring that capacity is built not only in large economies but also in smaller and emerging market economies. This inclusiveness is vital if reforms are to strengthen the system globally.

In all these ways, the BIS acts as both a forum and a catalyst, helping central banks pursue innovation with confidence while ensuring that national initiatives remain interoperable and coherent at the global level.

Conclusion: cooperation in times of change

Let me conclude by returning to the theme of this forum: international financial governance and cooperation in times of change.

Technology is rewriting what is possible. But governance will determine what is achieved.

By articulating clear visions, laying solid foundations, providing public goods and promoting private innovation, central banks can manage transitions in ways that preserve stability and trust. By working together, we can ensure that reforms avoid fragmentation and instead foster integration.

This is not only a question of efficiency. It is a question of trust and collective responsibility. If we succeed, the financial system of tomorrow will carry forward the strengths of today and embody the spirit of building good governance together that this forum so powerfully represents.

Speaking here in Beijing, I am reminded that good governance is not only a challenge, but also an opportunity.

Thank you.