The Brave New World of CBDCs, Tokenized Assets, and Unified Ledgers

Jan Krikke
7 min readSep 15, 2023


Central banks and financial institutions around the world are working on the internationalization of central bank digital currencies (CBDCs). The global network will be able to process cross-border payments in real time. The next step could be the “tokenization” of all tradable assets, anything from equities and real estate to gold.

In the coming years, CBDCs will replace cash with digital currencies that are stored on a ledger maintained by central banks. Users download a digital wallet to their mobile phone to receive their salary and to pay for goods and services. With a global CBDC network, users would be able to transfer money instantly to other digital wallets anywhere in the world.

China leads in the deployment of CBDCs. The e-yuan is now available in 17 Chinese provinces and 26 cities. More than 250 million people have downloaded the digital wallet from the People’s Bank of China (PBOC). Local governments and state-owned companies are paying salaries in digital yuan to encourage the use of CBDCs.

Tests are currently under way on internationalizing CBDCs. The PBOC, the International Monetary Fund (IMF), the Bank for International Settlements, and other monetary authorities are working on the “rails” that can make CBDC platforms interoperable. A global network of CBDC planforms would enable cross-border payments in real time and at no cost to the user.

CBDCs use a modified version of blockchain, the distributed (non-centralized) ledger technology used to validate transactions of crypto coins like Bitcoin and Ethereum. Unlike cryptocurrencies, CBDC platforms of central banks are centralized. CBDC platforms are under the control of national governments.

Developing an international CBDC network took on more urgency last year after Western countries banned Russia from SWIFT, the Belgium-based global messaging service for commercial banks. SWIFT has a virtual monopoly on the world’s cross-border payment transactions.

Russia’s exclusion from SWIFT raised global concerns, especially in the Global South. If a world power like Russia could be banned from the global payment system, any country running afoul of Western policies could be next.

The weaponizing of SWIFT, together with the confiscation of US$300 billion in Russian currency reserves, also gave a new impetus to BRICS, the loosely associated grouping of Brazil, Russia, India, China and South Africa.

Until recently, BRICS rarely made headlines. But after the financial war on Russia, more than 50 countries in the Global South applied for membership.

The weaponization of the financial system has led to a growing number of “peer-to-peer” cross-border payment agreements. Countries are increasingly trading in their own currencies, bypassing SWIFT and the global dollar system. Peer-to-peer cross-border payments are immune to Western sanctions.

Another concern of BRICS and the Global South is the debt levels of the advanced economies. Countries in the Group of Seven are drowning in a sea of debt. US debt alone exceeds $32 trillion, or 120% of GDP. Interest payments on the national debt will soon be the largest item in the US budget.

Signs of a loss of faith in the dollar are everywhere. China, Japan and Saudi Arabia are selling record amounts of US debt (Treasuries). China is reinvesting the money in gas fields in the Middle East. At the same time, central banks around the world are buying gold in record amounts.

Gold is historically used as protection against currency debasement (monetary inflation). But it can also used to reset and recalibrate the monetary system if currencies collapse.

The massive purchases of gold by central bankers, who have a deeper understanding of the financial system than most, suggest they see a monetary reset as a real possibility. History shows that reserve currencies have an average lifespan of about 100 years.

A new gold standard would also be a blow to Modern Monetary Theory (MMT), a concept that emerged 40 years ago and is based on the assumption that governments issuing their own currency can never go bankrupt. MMT argues that governments can always print more money. But that assumes the economy is a closed, self-contained system.

The US has a perennial trade deficit and trillions in overseas debt (net 60% of its GDP). Its foreign creditors have already been shown to have a limited tolerance for unlimited money-printing. History shows that the demise of a reserve currency is typically accompanied by the debasement of the currency.

Measured against gold, the dollar has lost more than 90% of its value since the late US president Richard Nixon took it off the gold standard in 1971. The US government can print all the money it wants, but a gold-based monetary reset would make it clear that it can’t print oil, rare earths, or gold.


CBDCs, like banknotes, are “tokens” of money. They are represented by a binary string (a block of data) that is unique to that given currency unit. The block of data is stored on the ledger of the central bank.

If currencies can be tokenized, so can other tradable assets. Central banks are looking at the tokenization of equities, insurance policies, property titles, and anything that has monetary value. The token contains all the required data for that asset.

For instance, a tokenized insurance policy contains data on the policy (terms and conditions, expiration date, etc), and who is allowed to interact with the object. The block may be given access to the bank account of the policyholder to enable renewal payments.

Linking CBDC wallets with insurance policies, tax records, credit history, and other assets and transactions creates a so-called unified ledger, a single register of all assets and transactions of the owner of the CBDC wallet.

A tokenized CBDC platform can also accommodate cryptocurrencies like Bitcoin and Stable Coin. Central banks in some countries may prohibit cryptos, while others may allow crypto trading and the conversion of CBDC currencies. The changing value of cryptocurrencies, like that of other assets, can be updated in real time.

Unified ledgers

This year, the Bank for International Settlements published a speech by Hyun Song Shin, head of research at the BIS, titled “A Blueprint for the Future Monetary System.” The report included a chapter on tokenization and listed the key points:

  • A new type of financial market infrastructure — a unified ledger — could capture the full benefits of tokenization by combining central bank money, tokenized deposits and tokenized assets on a programmable platform.
  • Multiple ledgers — each with a specific use case — might co-exist, interlinked by application programming interfaces to ensure interoperability as well as promote financial inclusion and a level playing field.

The picture that emerges from the combination of CBDCs, tokenization, and a unified ledger is a globe-spanning network of central banks, each with their own laws and regulations, but interoperable with CBDC platforms in all other countries that adhere to a common protocol.

The BIS was not the first to envisage a globally integrated CBDC platform. In 2021, China proposed a protocol for CBDCs that includes rules on how they can be used around the world and what information they can share.

A tokenized global financial system combines centralization (on a domestic level) with decentralization (on a global level). Domestically, the central government is the gatekeeper; globally, there is no gatekeeper except the commonly agreed-upon protocol.

A global interoperable CBDC platform would transform the concept of money. Multiple currencies and tokens of tangible assets could be traded seamlessly in real time. A unified ledger creates simplicity through complexity. It would have only two kinds of users: debtors and creditors.

Opponents of the digitization of the financial system fear that CBDCs would lead to an Orwellian world. They note that governments could track how, when, and where people spend their money. Proponents argue that CBDCs would create the hyper-transparency that is needed to combat fraud, corruption, and inequality.

On the plus side, each country can decide how to implement its CBDC platforms and how it interacts with foreign platforms. Autonomy and ethical governance are key. Opposition to CBDCs tends to be higher in countries where trust in government is low.

Originally published at on September 15, 2023.



Jan Krikke

Author of Creating a Planetary Culture: European Science, Chinese art, and Indian Transcendence