There are other advantages too. Tokenization allows different forms of digital money, such as tokenized bank deposits, fiat-pegged stablecoins, and tokenized central bank reserves, to function seamlessly as settlement assets on the same ledger.
It also allows high-quality assets to be quickly deployed to platforms as collateral.
But all this is not without risks.
The hidden danger
The delays that tokenization eliminates are not just inefficiencies, Adrian wrote. They also give banks, regulators and risk managers time to detect problems before they spread.
If this buffer is removed, a market shock, a coding error, or a sudden wave of automated selling could affect the system before anyone can intervene.
“Liquidity demands materialize in real time, collateral requests can be automated, and failures can propagate faster than institutions or supervisors can respond,” he wrote. “Risk [sic] that were once in charge of the balance sheet of the individual institutions behind a transaction are increasingly focused on the platforms and code that govern these transactions.”
Adrián also pointed out concentration risk. Tokenization tends to channel activity to fewer and larger platforms. “When infrastructure becomes the central axis,” he warned, “governance failures become systemic events.”
Regarding cybersecurity, he warned that consolidation in shared ledgers “amplifies the importance of operational resilience, cybersecurity and crisis management.”
