Tokenising money can have various benefits. For example, tokens can be programmed with rules, allowing transactions to be automatic and conditional. It can create new business models as the issuance of money is separated from the use of money.

Tokenisation involves giving money or assets a new technical form without changing the characteristics of the underlying money or assets. Examples of tokenised money and assets are

• tokenised bank deposits that would be legally and economically identical to money in bank accounts, and thus represent a claim on the bank
• tokenised securities that would be legally and economically identical to traditional securities and represent the rights attached to a security, such as owning a share
• tokenised central bank reserves, also known as wholesale CBDC, would remain a claim on a central bank. Like traditional central bank reserves, these reserves would only be available to institutions that already have access to central bank reserves. See section “Wholesale CBDC – tokenised central bank reserves”.

Globally, the scope of tokenised assets is still very limited, but it does include bank deposits (e.g. JPMD issued by J.P. Morgan Chase), money market funds (e.g. BUIDL issued by Blackrock) and securities (e.g. Siemens corporate bonds). In Sweden, tokenised money in Swedish kronor does not yet exist and although some Swedish actors are involved in experiments with tokenised assets, these are at an early stage.

Wholesale CBDC – tokenised central bank reserves

Today, most payments and securities transactions are settled in central bank money, as it is the safest form of money and eliminates the credit and counterparty risks that would otherwise arise when private money is used. As traditional forms of regulated private money and financial assets take on a different technical representation, the question arises whether we also need new forms of central bank money. To ensure that central bank money continues to be used for settlement, the central banking community is working on both modernising existing settlement systems and creating entirely new settlement services, such as developing central bank money in a new technical form – wholesale CBDC.

For example, the ECB is currently developing a new settlement service for central bank reserves in tokenised form, Pontes. They are also exploring a longer-term solution in Project Appia to facilitate safe and efficient settlement in central bank money when different forms of assets and money are tokenised.^[102] See ECB commits to distributed ledger technology settlement plans with dual-track strategy (ECB) retrieved 19-01-2006. The Riksbank is following these projects closely and may in the future choose to use these technical solutions to provide new settlement services in Swedish kronor.