BIS and Banks to Test Tokenization of Cross-Border Payments

The Bank for International Settlements and seven central banks including the Federal Reserve Bank of New York will test using tokenization to increase the speed and integrity of international payments.

Partnering with a large group of private financial companies, they will explore combining wholesale versions of tokenized central bank money and commercial bank deposits on a unified, programmable platform.

Using tokenization, which involves recording assets on a blockchain, has the advantage of combining messaging and settlement aspects of a payment in one transaction, said Hyun Song Shin, an advisor and researcher at the BIS Innovation Hub.

The aim of ...