The Bank for International Settlements, which is the central bank for central banks, has released findings showing that tokenisation can speed up how banks send money to each other across countries. Tokenisation means converting assets like cash into digital tokens that can move quickly through computer networks. The BIS studied how this technology works for wholesale payments, which are large transfers between banks and big companies, not everyday consumer transfers.
Right now, when a bank in the United States wants to send money to a bank in Europe, it takes time because many intermediaries must process and verify the transfer. The process can take a day or more. BIS researchers found that digital tokens could cut this time significantly by removing unnecessary middlemen and letting institutions transfer value directly to each other.
Banks and financial regulators are affected because faster cross-border payments mean they can reduce costs and offer better service to their customers. Large multinational companies that move money between countries would also benefit because their transfers would complete faster and with fewer fees. Smaller countries that depend on fast international payments for trade would see improved efficiency in their economies.
The BIS did not announce a specific date for widespread adoption, but central banks around the world are now studying the findings. Several countries, including Switzerland and Singapore, are already running pilot programs to test tokenisation with real transactions. Financial institutions will likely begin small experiments with this technology over the next year to understand how it works with their existing systems.