There are other benefits as well. Tokenization enables different forms of digital money, such as tokenized bank deposits, fiat-pegged stablecoins, and tokenized central bank reserves to function seamlessly as settlement assets on the same ledger.
It also enables the rapid deployment of high-quality assets across platforms such as security.
But all this is not without risk.
The hidden danger
The delays that tokenization eliminates are not just inefficiencies, Adrian wrote. They also give banks, regulators and risk managers time to catch problems before they spread.
Remove this buffer, and a market shock, code error, or sudden wave of automated selling can ripple through the system before anyone can intervene.
“Liquidity requirements materialize in real time, security calls can be automated, and errors can propagate faster than institutions or regulators can react,” he wrote. “Risk [sic] that were once carried by the balance sheets of individual institutions behind a transaction are increasingly concentrated in the platforms and code that govern those transactions.”
Adrian also pointed to concentration risk. Tokenization tends to direct activity to fewer, larger platforms. “When infrastructure becomes the central hub,” he warned, “governance failures become systemic events.”
On cybersecurity, he warned that consolidation into shared accounts “reinforces the importance of operational resilience, cybersecurity and crisis management.”
