Tokenization has been seen by central banks for years as an experiment in the far future, an interesting idea developing in the "crypto world," but not a real concern in regulated finance. That assumption is no longer true.
Things like government bonds, money market funds, treasuries, private credit, commercial paper, and even institutional settlement flows are becoming more and more tokenized very quickly. What began as an interesting piece of technology is quickly becoming an important part of how global markets work. It's still a common mistake for central banks to see tokenization as a threat, a separate system that is meant to make it harder to control money or separate policy channels.
However, the truth is different; growing tokenized markets are not the real danger for central banks. The real issue is their absence from the design process.
Tokenization enhances monetary sovereignty, not diminishes it.
Central banks that participate gain visibility, influence, and policy leverage.
Those who resist tokenization risk losing all three benefits.
Why Tokenization Is Becoming Core Infrastructure
These days, tokenization isn't just an experiment for startups; it's a change that's being led by the biggest financial firms in the world. The BUIDL tokenized treasury fund from BlackRock is now one of the biggest on-chain funds in the world. For instant settlement, JPMorgan's Onyx platform is creating tokenized collateral networks. HSBC now offers tokenized gold products and digital custody for institutions. Several asset managers, including Franklin Templeton, WisdomTree, and Wellington, are releasing daily-liquid tokenized money market funds. The world’s financial plumbing is being rebuilt in real time.
Data has already validated this shift.
- Tokenized real-world assets (RWAs) have surpassed $20B+ in circulation.
- Citi estimates tokenized markets could reach $4–5 trillion by 2030.
- BCG projects $16 trillion in tokenized assets over the long term.
- The BIS, IMF, MAS, FCA, and ESMA now classify tokenization as market infrastructure innovation, not “crypto activity.”
Central banks can't win by competing because it causes liquidity to split up, and institutions will always go where the most money is available, whether on public chains or private networks, instead of using separate systems. Central-bank-designed systems also tend to suffer from limited adoption because they offer fewer incentives for institutional participation. By refusing to integrate with tokenized markets, central banks lose visibility into the very capital flows shaping modern finance, creating a transparency deficit at the policy level.
Meanwhile, banks are forced to run parallel infrastructure stacks, increasing operational expenses, compliance fatigue, and settlement risk. And crucially, CBDCs alone cannot address the needs of tokenized bond markets, collateral mobility, or programmable settlements. The plain fact is that a central bank can only regulate an open, programmable financial layer; they cannot compete with it.
Participation Protects the Currency
Tokenization is not the biggest threat to monetary sovereignty; exclusion from it is. Despite the lack of involvement from the central bank, millions of users transfer digital dollars across blockchains every day, making tokenized USD assets move around the world. In many emerging economies, USD stablecoins now act as "shadow digital dollars," acting as both a way to store value and settle transactions.
Ignoring them doesn't make their influence weaker; in fact, it strengthens it. At the same time, tokenized treasuries have set up parallel money rails where the yield is higher than in domestic savings accounts, settlement is instant, and middlemen are not required.
People may completely avoid domestic currencies if they don't take part, as they move toward tokenized USD instruments that are easier to use and have more liquid value. Interoperability is now an important part of real sovereignty. For instance, central banks must utilize the same digital channels where value is already flowing to maintain FX liquidity, manage cross-border capital, and monitor flows. A currency that cannot be integrated becomes irrelevant.
Africa can get ahead by creating a digital-first clearing infrastructure, tokenizing land records, carbon credits, and agricultural goods, making issuance markets that are open to small businesses, attracting capital from people living outside of Africa into on-chain government instruments, and relying less on dollar stablecoins through trustworthy domestic tokenized assets.
The continent can build a modern market infrastructure right away, without having to deal with old systems that aren't working well.
Participation is not optional.
It is a continental advantage.
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