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On June 25, the Bank for International Settlements (BIS) published its annual economic report named “A Tale of Three Journeys,” which emphasized the importance of digital innovation in the monetary and financial system, <a href="https://www.bis.org/publ/arpdf/ar2023e_ov.htm" rel="noopener noreferrer nofollow">highlighting</a> the potential for tokenization as the next major technological leap.The report suggests that tokenization, the digital representation of money and assets on a programmable platform, could revolutionize the current financial system and facilitate new economic arrangements that were previously impossible.According to the Bank for International Settlements:<blockquote>Tokenization could enhance the capabilities of the monetary and financial system, not just by improving current processes but also by enabling entirely new economic arrangements that are impossible in today’s system. In short, tokenization could improve the old and enable the new.</blockquote><h2 id="header-0">A “unified ledger” blueprint</h2>Within the report, the BIS also presented a blueprint for the future monetary system, envisioning a “unified ledger” as a new financial market infrastructure (FMI).The blueprint includes three key elements: “central bank digital currencies (<a href="https://finbold.com/topic/cbdcs/" rel="noopener noreferrer nofollow">CBDCs</a>), private tokenized money in the form of tokenized deposits, and tokenized versions of other financial or real assets, depending on the particular use case.”The BIS stresses that while incremental changes to existing systems have limitations, a unified ledger offers transformative potential and could unlock arrangements with clear economic rationale.<h2 id="header-1">“Crypto is a flawed system”</h2>The annual economic report also underlined the Bank for International Settlements’ overall stance on digital assets calling <a href="https://finbold.com/category/cryptocurrency-news/" rel="noopener noreferrer nofollow">crypto</a> a ‘flawed system.” As per the publication:“To be sure, in crypto, stablecoins that reside on the same platform as other crypto assets also perform a means of payment role. However, for reasons explored at length in last year’s Annual Economic Report, crypto is a flawed system, with only a tenuous connection to the real world. Central bank money is a much firmer foundation. The full potential of tokenization is best harnessed by having central bank money reside in the same venue as other tokenized claims.”Evidently, BIS is not a supporter of digital assets. In February of 2023, the BIS chief Agustín Carstens <a href="https://finbold.com/bis-chief-says-cryptocurrencies-dont-make-for-trusted-money/" rel="noopener noreferrer nofollow">said</a> <a href="https://finbold.com/cryptocurrencies/" rel="noopener noreferrer nofollow">cryptocurrencies</a> “don’t make for trusted money” and urged implementing all measures to prevent crypto-related activities from having “a systemic impact.”Featured image via Brooking Institution <a href="https://www.youtube.com/watch?v&#61;BmH65qRezVw" rel="noopener noreferrer nofollow">YouTube</a>Read more cryptocurrency news on <a href="https://finbold.com/category/cryptocurrency-news/?utm_source&#61;CMC&amp;utm_medium&#61;social&amp;utm_campaign&#61;CMC&amp;utm_content&#61;long" rel="noopener noreferrer nofollow">Finbold.com</a>.

BIS says crypto is ‘flawed system,’ pushes for a ‘unified ledger’ via tokenization

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