G20 Prepares for Digital Currency Discussions After Key Tokenization Reports
The Bank for International Settlements (BIS) and the Financial Stability Board (FSB) have issued reports on tokenization ahead of the G20 Finance Ministers and Central Bank Governors meeting scheduled for October 23-24.
With Brazil presiding over the G20 in 2024, similar to India’s role last year, discussions on digital currency are being prioritized.
Both the BIS and FSB’s papers highlight that while tokenization is relatively new, it poses risks akin to traditional finance, albeit with some unique challenges.
The FSB pointed out the lack of a standardized definition for tokenization, along with concerns about liquidity, maturity mismatches, leverage, asset quality, and operational fragilities. They noted that tokenization, being limited in scale, currently does not threaten financial stability.
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Both organizations concluded that, despite the associated risks, tokenization offers potential benefits for safety and efficiency. They called for increased monitoring and suggested that central banks consider regulatory approaches.
Previously, India had advocated for a global regulatory framework for crypto during its G20 presidency, a stance supported by the FSB, which has made tokenization a regulatory priority for 2024. The BIS is also involved in several tokenization projects through its Innovation Hub in collaboration with central banks worldwide.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
