IMF and BIS coin new crypto buzzword, replacing blockchain technology.

The International Monetary Fund (IMF) and the Bank for International Settlements (BIS) recently published separate reports about the future of the monetary system, both of which were positive about the potential for tokenization and mentioned cryptocurrency and central bank digital currencies (CBDCs). Even big financial organizations like JPMorgan and Goldman Sachs have expressed interest in tokenization. The reports provide insight into how bureaucrats view crypto, with both organizations agreeing that tokenization is the killer application for crypto. Tokenization is the process of representing claims digitally on a programmable platform, and involves integrating the records of the underlying asset with the rules and logic governing the transfer process for that asset. The IMF and BIS are primarily interested in the tokenization of CBDCs, rather than commodities or real estate. The reports provide a quote from the IMF report explaining the concept of tokenized reserves being used for payment and settlement.

The main idea behind the reports of IMF and BIS on tokenizing CBDCs is the need for a single or unified ledger. These organizations are very distrustful of non-central bank money and believe that a centralizing force is required to ensure settlement stability and a unified currency.

BIS defines this unified ledger as a “common venue” where money and other tokenized objects come together to enable seamless integration of transactions and to open the door to entirely new types of economic arrangements.

It is unclear what will come of these discussions and explorations into tokenization, if anything at all. While many countries are researching CBDCs, only a few have implemented these systems.

• Orange Pilling = Fast track to Hyperbitcoinization by convincing your barber/stylist.
• Is Bitcoin more than just a store of value?
• Bitcoin is like a high-flying tech stock.

However, the technobabble surrounding this topic is overwhelming. If organizations like the IMF and BIS want to create a CBDC with a single, unified, centralized ledger, they do not need to pretend they are using cryptocurrency to do so. Conflating things like Bitcoin and the tokenization of CBDCs is misguided. At best, it is a misunderstood yearning for a more tech-enabled money system. At worst, it is a treacherous, intentional distraction from what makes Bitcoin and crypto attractive – their lack of central control. Exactly what the central banks and regulators are trying to insert.

Simply signaling innovation is not actually innovating. Tokenization is hardly an improvement over what financial institutions already do. It is a distraction, and ultimately, it is nothing.