Tokenisation and wholesale CBDC explored
Published: 10 March 2025
Tokenisation is a technique whereby traditional assets are converted into digital representations of them – known as tokens. Traditional assets include shares, bonds and bank deposits. One of the advantages of tokenisation is that transactions can be made in real time, without traditional intermediaries. Another advantage is that platforms where the transaction is carried out can hold both tokenised money and other assets. The number of tokenised assets and the number of transactions are limited today, but there are several market participants who believe that tokenisation will increase in the future.
Tokenised deposits could improve cross-border payments. This is something that the Bank for International Settlements (BIS), in cooperation with central banks and private financial institutions, is exploring in project Agora. The project aims to improve the efficiency and security of cross-border payments. This is done by linking tokenised bank deposits to tokenised central bank money (i.e. wholesale Central Bank Digital Currency, wCBDC) on a common platform.
The wCBDC is a form of central bank digital currency for transactions between banks, central banks and other financial institutions based on new technologies. In essence, wCBDC is central bank digital money, similar to the reserves that institutions already hold in accounts with central banks, for example in the RIX system. However, unlike existing central bank money, wCBDC can function in transactions with new forms of tokenised assets on a blockchain. The ECB has launched a project together with the French, German and Italian central banks, among others, to explore the pros and cons of different wCBDC solutions.
FACT BOX – Central banks explore central bank digital money for different purposes
BIS has over several years examined which central banks are exploring digital central bank currencies for retail payments, so-called retail CBDC (rCBDC) and large-value payments between financial institutions, so-called wholesale CBDC (wCBDC) respectively.
The 2024 survey is based on survey data from 2023. It shows that 94 per cent of the central banks that responded to the survey are exploring central bank digital money in some form. This is about the same proportion as the year before. The survey shows that interest in the wCBDC has increased. The share of respondents who think they might launch a wCBDC has increased. At the same time, it shows that the share of central banks that believe they might launch an rCBDC within the next six years has decreased.
In countries that have a payments market comparable to Sweden's, interest in central bank digital money varies. In the euro area, the ECB has decided to proceed with the preparations for a digital euro and experiments with the wCBDC are ongoing. Also Norges Bank and the Bank of England are exploring both rCBDC and wCBDC. Nationalbanken does not see a need for an rCBDC in Denmark at present. In Australia, the Reserve Bank of Australia (RBA) and Treasury have come to a similar conclusion. The RBA will continue to explore the wCBDC in the future. The USA stopped the development of a CBDC in January, citing risks to financial stability and individual privacy. The Bank of Canada announced in 2024 that it is de-prioritising its work on the rCBDC, to focus on other payment issues. In Sweden too, work on the e-krona has changed focus. In the autumn of 2023, the e-krona project was brought to a conclusion, and the Riksbank will instead continue to analyse and follow international policy work, particularly the work on the digital euro.