Connect with us

Hi, what are you looking for?

G20 officials
G20 officials

Finance

G20 Talks Emphasize Potential Benefits and Risks of Tokenization

Emphasizing its possible advantages and related concerns, the Bank of International Settlements and the Financial Stability Board have provided results to G20 officials on tokenization. As Brazil assumes the G20 presidency, debates on digital asset regulation are growingly important.

Revised ArticleBoth the Bank for International Settlements (BIS) and the Financial Stability Board (FSB) have offered ideas on tokenization as the Group of 20 (G20) Finance Ministers and Central Bank Governors get together on October 23 and 24. With Brazil leading the G20 in 2024, there is a fresh emphasis on the ramifications of digital currencies, evocative of India’s need for such conversations last year.

October 22 saw both companies publish studies outlining their viewpoints on tokenization. Despite conducting the research independently, they identified common themes. Despite tokenization being a relatively new concept, the studies highlighted its incomplete understanding and the common hazards already present in conventional banking.

The FSB noted that debates on tokenization would be complicated, as there is no widely agreed definition of it. Their study included a range of topics, including operational vulnerabilities, leverage risks, liquidity problems, and possible mismatched asset maturity. They came to the conclusion that, given its present scope, tokenization does not seriously jeopardize financial stability but admitted that these hazards may change as the use of tokens develops.

Similarly, the BIS cautioned that tokenization also impacts the challenges faced by conventional financial institutions, such as credit, liquidity, and operational hazards. They underlined that tokenization may bring about notable changes in the roles of middlemen and market systems.

Both companies noted that while tokenization necessitates stringent oversight and regulation, it has the potential to enhance security and efficiency within financial institutions. They pushed central banks to begin thinking about the best way to properly control tokenization.

The FSB, preparing for 2024 regulatory goals, shares India’s support for a comprehensive global regulatory framework for cryptocurrencies. The BIS, in collaboration with various central banks worldwide, is actively involved in multiple tokenizing initiatives through its Innovation Hub.

author avatar
Satpal S
Satpal is an Editor and Author at 4C Media Co, specializing in all stories and news related to crypto and finance.
Advertisement

You May Also Like

Cryptocurrency

Until a new chairman is confirmed, the U.S. Securities and Exchange Commission (SEC) might hold off on laying a clear regulatory road for cryptocurrencies....

AI

OpenSea promptly cleared erroneous information that was spreading regarding a planned NFT airdrop. According to CEO Devin Finzer, a webpage including terms and conditions...

Cryptocurrency

Driven by its aggressive Bitcoin acquisition approach, Metaplanet has seen a startling 4,800% rise in its stock price over the past year. Often likened...

Cryptocurrency

The U.S. Commodity Futures Trading Commission (CFTC) has announced a shift in its enforcement approach, focused on fraud prevention and victim support. Under Acting...

polkadot
Polkadot (DOT) $ 5.19 1.20%
bitcoin
Bitcoin (BTC) $ 97,466.11 0.91%
ethereum
Ethereum (ETH) $ 2,724.95 1.81%
cardano
Cardano (ADA) $ 0.800543 1.23%
xrp
XRP (XRP) $ 2.74 7.53%
stellar
Stellar (XLM) $ 0.350557 4.05%
litecoin
Litecoin (LTC) $ 125.18 0.70%