Is Tokenization the Future?

21 Jan 2026 09:15h - 10:00h

Session at a glance

Summary

This World Economic Forum 2026 panel discussion focused on tokenization and its potential to transform global finance, featuring central bankers, financial executives, and crypto industry leaders. The conversation explored whether tokenization is poised for a breakout year, with participants examining both opportunities and challenges in digitizing financial assets.

François Villeroy de Galhau, Governor of the Central Bank of France, emphasized that tokenization could bring significant benefits to global finance through reduced costs and improved efficiency, while warning of three key threats: privatization of money, loss of sovereignty, and financial risks from unregulated stablecoins. He advocated for a complementary system combining public central bank digital currencies (CBDCs) with regulated private tokenized currencies. Valérie Urbain from Euroclear highlighted tokenization’s potential for financial inclusion and market democratization, citing ongoing pilots with euro bonds and commercial paper worth 300 billion euros.

Bill Winters of Standard Chartered predicted that most transactions would eventually settle in digital form, emphasizing the importance of trusted infrastructure and regulatory frameworks across multiple jurisdictions. Brian Armstrong from Coinbase argued that tokenization solves efficiency problems and democratizes access to high-quality investments for billions of unbanked individuals globally, while also discussing the emergence of a “Bitcoin standard” as an alternative to fiat currencies. Brad Garlinghouse from Ripple noted massive growth in stablecoin transactions, from $19 trillion in 2024 to $33 trillion in 2025, while emphasizing the need for bridges between traditional and decentralized finance.

The panel addressed regulatory challenges, with European participants noting that Europe has advanced regulatory frameworks like MiCA, while the US continues developing comprehensive crypto legislation. Concerns were raised about global competitiveness, particularly regarding whether stablecoins should pay rewards or interest, and the geopolitical implications of dollar-dominated stablecoins. The discussion concluded that while tokenization offers significant opportunities for financial innovation and inclusion, success requires careful balance between innovation and regulation, maintaining public-private partnerships in monetary systems, and ensuring appropriate risk awareness among new investors accessing previously unavailable asset classes.

Keypoints

Major Discussion Points:

– The Current State and Future of Tokenization: The panel explored whether 2026 represents a breakout year for tokenization, with participants discussing the evolution from early real estate tokenization concepts to current applications in stablecoins, securities, and cross-border payments. There was consensus that tokenization will transform finance through improved efficiency, real-time settlement, and democratized access to investment opportunities.

– Sovereignty vs. Innovation in Digital Currency: A central tension emerged between maintaining monetary sovereignty and embracing innovation. The French Central Bank Governor emphasized the need for public-private partnerships in money systems, advocating for CBDCs as anchors while allowing private tokenized currencies. This contrasted with views supporting more decentralized approaches like Bitcoin as an alternative monetary standard.

– Regulatory Frameworks and Global Competition: Participants debated the balance between regulation and innovation, with discussions on Europe’s MiCA legislation, the US Genius Act, and the need for clear regulatory frameworks. The conversation highlighted concerns about global competitiveness, particularly regarding US dollar-backed stablecoins versus European alternatives and the risk of regulatory fragmentation across jurisdictions.

– Trust, Infrastructure, and Market Adoption: The panel examined what drives adoption of tokenized assets, focusing on the critical role of trust in both instruments and infrastructure. Banks were positioned as trusted intermediaries that could bridge traditional finance with decentralized systems, while the importance of interoperability and mature market infrastructure was emphasized for widespread adoption.

– Democratization vs. Speculation Concerns: Participants discussed how tokenization could provide investment access to previously excluded populations (the “unbrokered” segment), while addressing concerns about whether fractional ownership might increase speculation. The conversation touched on the need for financial literacy and appropriate risk awareness alongside expanded access.

Overall Purpose:

The discussion aimed to assess the current state and future potential of tokenization in global finance, examining both opportunities and challenges as the technology moves from experimental phases toward mainstream adoption. The panel sought to address key questions about regulatory approaches, market readiness, and the implications for monetary sovereignty and financial inclusion.

Overall Tone:

The discussion maintained a cautiously optimistic and professional tone throughout. While participants were generally bullish on tokenization’s potential, they approached the topic with measured enthusiasm, acknowledging both benefits and risks. The conversation was collaborative rather than confrontational, even when participants disagreed (such as on Bitcoin as a monetary standard). The tone remained constructive and forward-looking, with participants focusing on practical implementation challenges and solutions rather than theoretical debates. There was a notable emphasis on the need for balanced approaches that preserve stability while enabling innovation.

Speakers

Speakers from the provided list:

– Karen Tso – Anchor of Squawkbox Europe on CNBC, panel moderator

– François Villeroy de Galhau – Governor of the Central Bank of France, ECB Governing Council member, chairs the BIS (Bank for International Settlements)

– Bill Winters – Group Chief Executive, Standard Chartered Bank, International Business Council member

– Valérie Urbain – Chief Executive Officer, Euroclear Belgium

– Brian Armstrong – Co-Founder and Chief Executive Officer, Coinbase

– Brad Garlinghouse – Chief Executive Officer, Ripple

– Audience – Various audience members asking questions, including Fernando (chief economist of a Brazilian bank), founder of a Latin American payments company

– Moderator – (appears to be the same as Karen Tso based on context)

Additional speakers:

None identified – all speakers in the transcript correspond to those listed in the provided speakers names list.

Full session report

Tokenisation and the Future of Global Finance: A World Economic Forum 2026 Panel Discussion

Executive Summary

The World Economic Forum 2026 panel on tokenisation brought together central bankers, traditional financial executives, and cryptocurrency industry leaders to examine whether 2026 represents a breakthrough year for tokenised assets. The discussion revealed both significant momentum behind tokenisation and fundamental disagreements about monetary sovereignty, regulatory approaches, and the future structure of global financial systems.

The panel featured François Villeroy de Galhau, Governor of the Central Bank of France and ECB Governing Council member; Bill Winters, Group Chief Executive of Standard Chartered Bank; Valérie Urbain, Chief Executive Officer of Euroclear Belgium; Brian Armstrong, Co-Founder and Chief Executive Officer of Coinbase; and Brad Garlinghouse, Chief Executive Officer of Ripple. The discussion was moderated by Karen Tso, anchor of Squawkbox Europe on CNBC.

The Current State and Momentum of Tokenisation

Governor Villeroy de Galhau opened by highlighting the rapid evolution of the tokenisation landscape: “Let me stress that tokenisation and stablecoins might be the name of the game really this year. If we had been in Davos one year ago, remember, nobody spoke about stablecoins. And now it’s very fashionable.”

Brad Garlinghouse provided evidence of this momentum, stating that stablecoin transactions grew from $19 trillion in 2024 to $33 trillion in 2025—a 75% increase. This growth encompasses cross-border payments, trade finance, and institutional settlements beyond speculative trading.

Valérie Urbain highlighted practical implementations, noting Euroclear’s commercial paper tokenisation initiative in France covering 300 billion euros. This pilot programme tests the migration of market ecosystems to tokenised infrastructure, providing real-world data on operational challenges and benefits.

Brian Armstrong contextualised tokenisation’s potential by identifying approximately four billion adults worldwide who lack access to high-quality investment opportunities. Tokenisation could democratise access through fractional ownership and reduced barriers to entry.

Sovereignty Versus Innovation: The Central Tension

The most significant theme was the tension between monetary sovereignty and financial innovation. Governor Villeroy de Galhau identified three primary threats from unregulated tokenisation: privatisation of money, loss of sovereignty, and financial risks from fragmented stablecoins.

“The first threat is privatisation of money. And loss of sovereignty for many jurisdictions,” the Governor explained. “If we have only a currency in the future which is private, and let us be honest, which is issued by American issuers, private companies, then we will have a question on sovereignty.”

The Governor advocated for a two-tier monetary system combining public central bank digital currencies (CBDCs) with regulated private tokenised currencies. The European Union is developing this approach through wholesale CBDC projects and a European ledger initiative.

Brian Armstrong presented a different perspective, discussing what he termed a “Bitcoin standard” as an alternative approach. “Democracies around the world, once we came off the gold standard, are struggling to balance their budget. They’re all running deficits and it’s caused inflation in fiat currencies,” Armstrong argued.

Governor Villeroy de Galhau firmly rejected this concept: “The euro is not in danger from a Bitcoin standard because monetary policy and money are part of democratic sovereignty.” He emphasised that democratic institutions remain essential for legitimate monetary governance.

Regulatory Frameworks and Global Competition

The panel agreed on the necessity of regulatory frameworks while disagreeing on specific approaches. Governor Villeroy de Galhau emphasised that “regulation is not the enemy of innovation but a guarantee of trust, requiring the right balance between innovation and regulation.”

Brian Armstrong focused on preventing regulatory capture, arguing that “crypto legislation should not ban competition for traditional financial services and should allow fair competition on a level playing field.” He expressed opposition to the Clarity Act, which he viewed as potentially disadvantaging cryptocurrency companies.

The panel identified global competitiveness as crucial. Armstrong noted that “stablecoins are in global competition between US, China, and Europe, with Europe needing to move faster on European stablecoins.” Karen Tso specifically questioned whether Europe risked being left behind in this competition.

Stablecoins and Interest Payment Debate

A significant disagreement emerged regarding whether stablecoins and CBDCs should pay interest. Brian Armstrong argued that “stablecoins paying rewards puts more money in consumers’ pockets and ensures global competitiveness against offshore alternatives.”

Governor Villeroy de Galhau strongly opposed interest payments on CBDCs, stating that “the digital euro should not pay interest to preserve financial stability and avoid attacking the banking system.” He noted that China’s digital yuan pays dividends, but argued this approach was inappropriate for Europe.

Bill Winters offered a middle position, suggesting that “different types of tokens serve different purposes—medium of exchange doesn’t need interest, but store of value tokens should bear yield.”

The Role of Trust and Infrastructure

Trust emerged as fundamental for tokenisation success, with participants identifying different sources. Bill Winters emphasised traditional financial institutions’ role, arguing that “banks bring embedded trust to the system through aggressive regulation, making them essential custodians of tokenisation infrastructure.”

Brian Armstrong presented an alternative view, arguing that decentralised protocols provide superior trust through elimination of human control. “Bitcoin is a decentralised protocol. There’s actually no issuer of it. So that’s, in the sense that central banks have independence, Bitcoin is even more independent.”

Valérie Urbain highlighted the crucial role of financial market infrastructure in bridging different pools of liquidity and enabling interoperability between traditional and tokenised systems.

Audience Questions and Global Perspectives

The discussion included important questions from the audience that highlighted global concerns. A Brazilian bank economist asked about credit leverage and duration transformation in tokenised systems. Bill Winters responded that banks would continue playing essential roles in credit intermediation even as payment systems evolved.

A Latin American payments company founder questioned how blockchain adoption could benefit global south countries. The panellists acknowledged that tokenisation could provide financial inclusion benefits but required appropriate regulatory frameworks and infrastructure development.

Questions about energy consumption addressed environmental concerns. Brian Armstrong noted that “not all blockchains are equal in energy consumption—proof of stake uses 99.9% less energy than proof of work.” Brad Garlinghouse reinforced that most tokenisation activity occurs on energy-efficient blockchains.

Implementation Challenges

Bill Winters highlighted operational complexity, noting the challenge of working across “60+ different regulatory regimes globally.” This fragmentation creates significant challenges for institutions deploying tokenised solutions internationally.

The panel discussed various pilot programmes providing practical learning. France’s G7 Presidency has placed innovative finance on the international agenda, facilitating coordination among major economies.

Successful tokenisation requires not just technology but also legal frameworks, operational procedures, and market infrastructure adaptations. These practical considerations often prove more challenging than the underlying technology.

Democratisation and Risk Concerns

The panel addressed concerns that democratising investment access might increase speculation. Governor Villeroy de Galhau emphasised that “tokenisation opens investment access but must be accompanied by increased risk awareness and financial literacy.”

Bill Winters distinguished between legitimate democratisation and harmful speculation, arguing that “fractionalisation leads to transparency which is good for systemic stability despite potential for increased volatility.”

The discussion highlighted the need for comprehensive financial literacy programmes to accompany expanded investment access.

Future Outlook

Several fundamental questions remain unresolved. The extent to which tokenisation will expand beyond financial transactions to broader economic use, including retail payments, remains uncertain.

Regulatory harmonisation across jurisdictions continues developing, with different approaches potentially creating fragmentation. International coordination through forums like the G7 will be crucial.

The long-term relationship between decentralised systems and traditional fiat currencies requires further development. The panel’s discussions suggest complementary rather than replacement models are more likely to succeed.

Conclusion

The World Economic Forum 2026 tokenisation panel revealed an industry at a critical inflection point, with significant momentum across traditional financial institutions, regulatory bodies, and cryptocurrency companies. While there was agreement on tokenisation’s potential benefits—including efficiency gains and democratised investment access—fundamental disagreements about sovereignty and governance approaches remain.

The tension between democratic monetary control and algorithmic alternatives reflects broader questions about governance and trust in digital financial systems. The discussion suggests that successful tokenisation will likely involve hybrid approaches preserving existing sovereignty structures while enabling innovation.

The panel demonstrated that tokenisation has evolved from a purely technological discussion to a fundamental examination of monetary systems and global financial architecture. The path forward requires continued collaboration among diverse stakeholders, careful attention to both opportunities and risks, and recognition that success depends on building trust, maintaining stability, and serving the broader public interest.

Session transcript

Karen Tso

Good morning, distinguished guests, ladies and gentlemen. Welcome to this fantastic panel on tokenization. I’m Karen Tso, anchor of Squawkbox Europe on CNBC.

Now, just to remind you how we arrived at today, it was a few years back, I was at a property conference in the City of London. I left the conference convinced that just about every physical asset would be tokenized at some point, would be buying a piece of the Shard, the Empire State Building, pretty much any piece of real estate was up for some sort of fractional ownership.

But talk went quiet, superseded by AI fever. But it’s readily apparent in 2026 that there’s been a ton of work happening in the backdrop. We’ve got banks, we’ve got asset managers, crypto players, other innovators have been quietly working on the innovation.

And of course, the Trump family not so quietly storming to the space, promising to bring real estate assets onto the blockchain and to tokenize Trump properties this year. Now, is tokenization on the cusp of a breakout year in 2026? Is it the future of global finance?

We have a terrific panel. And just a reminder, you can get involved on socials, hashtag WEF 2026. So, on the panel today, we have joining us Francois Villaroy de Galou, who is the Governor of the Central Bank of France, also ECB Governing Council member.

Bill Winters, Group Chief Executive, Standard Chartered Bank, also International Business Council. Valérie Urbain, Chief Executive Officer, Euroclear Belgium. Brian Armstrong, Co-Founder and Chief Executive Officer, Coinbase.

And Brad Garlinghouse, who is the Chief Executive Officer of Ripple. Thank you so much for joining us today. Well, Governor, I want to kick off the conversation exploring why we are here today talking about tokenization.

France has the G7 Presidency this year. You’ve put innovative finance on the agenda already talking about

François Villeroy de Galhau

tokenization. Why? Good morning, Karen.

Good morning to you all. Let me first stress that tokenization and stablecoins might be the name of the game really this year. If we had been in Davos one year ago, remember, nobody spoke about stablecoins.

And now it’s very fashionable. I hope it will be still more important this year than Greenland, but we’ll see. And let me stress that tokenization is for the better.

I really believe it will bring progress in global finance, delivery versus payments, diminishing of cost of financial transactions, et cetera. By the way, we don’t know yet how far the use cases will go. If you look at the forecast for the volume of stablecoins, including on the U.S.

market, the bracket is very wide, and it’s interesting. Because at present, the use cases are concentrated on the crypto exchanges and a bit cross-border. I think it will come to domestic financial transactions, very significant.

Could it come to domestic, quote-unquote, economic transaction, including retail? The jury is still out. But anyway, it will develop, and I think develop for the better.

That said, there are threats. And as I am a central banker, let me insist a bit on at least I gave a speech two weeks ago with a triangle of threats and a triangle of answer, but let me sum up. The first threat is privatization of money.

And loss of sovereignty for many jurisdictions. And we know this is a real fear, especially in emerging countries. But if we have only a currency in the future which is private, and let us be honest, which is issued by American issuers, private companies, then we will have a question on sovereignty.

Here, the answer is CBDC. And let me be very brief on what we do in the European field, because we are pioneers here. Everybody is focused on the retail side and the so-called digital euro.

But I will insist more on the wholesale side, because as I said, the most important use cases will be all say on the financial. Here we develop a wholesale CBDC and let me stress that the European Union is completely pioneered. We will have this year, thanks to the so-called PONTES project, a pilot wholesale CBDC, first worldwide.

And then we will have a so-called APIA project, more comprehensive with a European ledger or European network. But let me insist, and I will stop there, Karen, I don’t want to be too long, that we still need a two-tier monetary system with public central bank money, which is the anchor, but with also private tokenized currency in euros and not only in dollars.

And this is a question of stable coins in euros and or tokenized deposits. The jury is still out. It’s up to European banks to develop and to choose.

We could have both of them, stable coins in euros and tokenized deposits in euros, bank deposits. But if we have none of them, I would be a bit worried about sovereignty. And what I say for the euro area is still more important, as I stressed, for many large emerging economies.

Governor, a terrific scene set,

Karen Tso

and we’ll circle back to some of those topics. But let’s hear from Valérie next up, because you’re a clear part of the infrastructure in Europe. You’ve been looking at pilots tokenizing euro bonds, UK guilds, gold with partners.

What has tokenization promised to achieve, and how transformative do you think it will be? Well, I think tokenization is – we see

Valérie Urbain

that as an evolution of the financial market, of the financial securities market, in the sense that with tokenization, you will certainly be able to reach out to a bigger range of investors, you will give access to finance to many more people.

So when we talk about inclusion, financial inclusion, tokenization definitely is part of the game. It’s also important for issuers, because if indeed you start reducing the time to market, you start reducing the cost of issuing, I mean, that also, it’s a benefit for the issuer side. Having said that, as you, as Governor was saying, the use cases start coming, so I think we start seeing emergence of interest and volumes into the digital assets, especially on the security side.

I think we have started an initiative with Banque de France to tokenize the commercial paper in France. I think, for me, it’s a very interesting initiative, because it is the first time that we are really trying to move a full market, a full ecosystem on tokenization. Because today what is very difficult is that you have issuers, for example, who are willing to issue digital assets, but then the investors are not really coming very fast.

So with this project on the commercial paper, it’s 300 billion euros, so it’s not small, but it is small enough to make sure that we can all learn the lessons and see how we can transpose this initiative in a broader sense.

Karen Tso

Bill, let me come to you. You’re on the record as saying most transactions will be tokenized by 2028. Are we really two years out from sweeping moves towards tokenization for transactions, or was that too optimistic?

Bill Winters

I’m not sure I said 2028. I definitely said that the end state is one where most things will settle in digital form, including real assets, but not everything, of course. But we’re, I think, at a major inflection point right now.

I’m not sure no one was talking about stable coins a year ago, but clearly it’s gathering momentum. It’s gathering momentum because we’ve made the leap in many, many fronts between the crypto world, where stable coins are absolutely embedded, and the trad-fi, or traditional finance, or fiat world, where stable coins.

will settle in digitized form. How we get there, I don’t know. We as a bank, we’re operating in 60 countries on the ground, another 60 that we deal in very actively, and that means we’ve got 60-plus regulators with 60 different regulatory regimes.

So how we get from point A to point B is we’ll be heavily influenced by regulation, but it doesn’t change the direction of travel.

Karen Tso

We can pick up on the regulation point in a moment. In the meantime, Brian, you are one of the biggest advocates for tokenization in the room. You’ve talked a lot on CNBC about the institutional demand that is coming into the mix.

What real-world problem does tokenization solve, and how does it promise to improve the future of finance?

Brian Armstrong

Yeah, well, tokenization solves a lot of problems. I mean, there’s an efficiency aspect to it. You can have real-time settlement, lower fees, but maybe the most powerful part of it is just democratization of access to investment in high-quality products.

A lot of people have heard about the unbanked. There’s actually an unbrokered segment of the world as well. There’s about four billion adults who don’t have access or any ability to invest in high-quality assets like the US stock market or real estate or whatever.

So what tokenization can do is it’s just like you have an underlying unit of that asset. You now have a token that’s one-to-one representative of that. The first version of this was stablecoins.

That’s another version of tokenization. So stablecoins have been growing enormously. We’re now seeing that happen with US equities, real estate.

It’ll happen with corporate paper, you know, commodities, like all kinds of things will come on chain. And this is just going to allow the people of the world to participate in this engine of wealth creation, which most of them don’t have access to if they’re only dependent on their labor for some source of income.

So it’ll be a great boon for capitalism. It’ll create more demand. When we, when we speak with funds like at BlackRock and Apollo, they’ve said, you know, they want to tokenize every single fund that they have and they just know that it’ll increase demand for their products.

So Coinbase launched a product called Coinbase Tokenize, which is helping institutions do this. And we’re incredibly bullish on it. If I can make one other point, just to build on what the central bank governor here said earlier, you know, I do think that stable coins are going to play a major role.

I think central bank digital currencies can also play a complementary role. And you know, people think about our current financial system as kind of sacrosanct and it’s the only way to do it. But you know, if you study the history of money, really it’s got created in like 1971 when Nixon went off the gold standard in the U.S.

and we currently have the system where most central banks don’t have any link to a hard commodity underneath. I think fiat currencies are going to continue to exist for a long time, but we’re also seeing the birth of a new monetary system that I would call the Bitcoin standard instead of the gold standard. And in the crypto space, that is a return to sound money and something that is inflation resistant because democracies around the world, once we came off the gold standard, are struggling to balance their budget.

They’re all running deficits and it’s caused inflation in fiat currencies. And so there is a real segment of the population that is looking for a new system based on hard money.

Karen Tso

Brad, on that note, there are lots of soundbites there, lots to respond to. We’ve already seen the momentum of first-stop tokenized assets on Ripple’s XRP ledger surged over 2,200 percent last year. Just weigh in from your perspective.

Brad Garlinghouse

Well, I think I agree with a lot of what was said here. You know, I do think the first poster child of tokenization is really stablecoins. You saw, as Brian observed, massive growth last year.

I think went from, in 2024, $19 trillion of transactions on stablecoins last year. In 2025, it’s $33 trillion, so about 75% growth. I think many in our industry would say that’s going to continue.

I think to the extent there’s space between what Brian was just talking about and how I think about the Bitcoin idea, the Bitcoin standard, I look at that, and I think it’s much more of the marriage. Sovereignty of fiat currencies, I believe, is for many countries sacrosanct. Ben Bernanke spoke at a Ripple event many years ago, and he made the point that governments will roll tanks into the street for giving up monetary supply, giving up the control of monetary supply, which stuck with me as, yeah, that makes sense.

At Ripple, we very much focus on building the bridges between traditional finance, as Bill was describing, what we now call trad-fi and decentralized finance. That has meant working with a lot of the banks around the world to build those bridges.

Karen Tso

Governor, you have to address this. Is the euro in danger from a Bitcoin standard?

François Villeroy de Galhau

No, I’m a bit skeptical, Brian. Sorry to say it about this idea of the Bitcoin standard. We left the gold standard, but the gold was only a technical mean.

What is important is what you say, Bert, that monetary policy and money is part of sovereignty, and we live in democracies, and I think the public role is key. And if we lose that, really you lose a key function of democracy. That said, I always keep repeating that money, as long as it exists for centuries, has been a public-private partnership.

You need a public anchor, whatever its form is. Remember, silver and gold were sovereign assets, so it was on the public side. And then you had banknotes, and you will have CBDC.

But anyway, the most important part of payments is in the private sphere, and this is a development of tokenized private money. But this tokenized private money must be regulated to inspire trust, confidence. And this is another danger we should treat, that tokenization could develop, if not safe enough, financial risk, with the multiplication of stable coins, which are very different, which are fragmented.

This is the issue bill you mentioned. And so we must have safe enough regulation. This is MECA in the Euro area.

This is now Genius in the U.S., which is welcome. Because if stable coins are not enough, we could have the risk of a somewhat Gresham’s Law, you know, this famous one, that the bad currency is more used for transaction and the good currency, which would be CBDC, would be kept for store values.

So I think we are on the right track to regulate. We could improve MECA, still more improve Genius, perhaps. And the question of compatibility you raised, we discuss it in the BIS.

I happen to chair the BIS. There is a so-called Agora project, and we will discuss it in the G7 in the French presidency. But regulation is not the enemy of innovation.

Once more, it’s a guarantee of trust.

Karen Tso

It’s fascinating that you say that. Brian, you mentioned a complementary role that you could play. Is there a complementary role in Europe when there’s so much regulation, and it is about the digital Euro?

Brian Armstrong

Yeah, I actually think these are very positive. So crypto just broadly is a technology to update financial services, so it’s going to help with stable coins and tokenized equities and crypto assets and trading. And by the way, borrowing and lending is also getting updated.

So I think that crypto is very good for fiat currencies. It’s very good.

François Villeroy de Galhau

of the World Bank, and we have a core mandate and we are accountable to that. But sorry to say that I trust more independent central banks with a democratic mandate than private issuers of Bitcoin, which have a very useful role.

Brian Armstrong

Bitcoin is a decentralized protocol. There’s actually no issuer of it. So that’s, in the sense that central banks have independence, Bitcoin is even more independent.

There’s no country or company or individual who controls it in the world. And so anyway, I think it’s a healthy competition because if people can decide which one they trust more, and I think it’s actually the greatest accountability mechanism on deficit spending.

Karen Tso

Bill, come in.

Bill Winters

I’d like to come back on the trust comment. We were talking about the trust in the instrument itself, which is key. And obviously, the trust and sovereignty are two conflicting objectives.

And the Bernanke tank point is very real. It’s very real. And I’m sure he’s right.

I’m sure he’s right today as well. But there’s also trust in the infrastructure. So for a monetary system to be effective, you have to have the instruments that work and you have to have the pipes that work.

And the people who are custodians of the pipes and the people who are the custodians or the market, that’s the custodian of the instrument, need to be trusted by the sovereign Unless sovereigns are prepared to give up power and go to a completely decentralized world, but that’s not the way it seems to be happening and I think we’ll probably hear about that later today as well in a very different context, so, you know, power matters when it comes to money.

So, the trusted entities in the financial system today are many but I’ll put banks at the center of that, mostly because we’ve been regulated to the point of extinction in some cases. But, you know, we’ve been regulated aggressively on the back of misdeeds. So, there is an embedded trust in the banking system which is why Standard Chartered has been, I’ll say, at the forefront of a few of these initiatives because we want to parlay the trust that we can bring, we collectively as banks can bring to the system and lever these fantastically powerful new instruments in a complementary way.

Karen Tso

There’s an element of trust but there’s also an element of momentum. We’re seeing it in terms of the swing away to gold which is now just a momentum trade as trust is eroded. Brad, do you want to come in on this and the element of trust?

Brad Garlinghouse

Well, I certainly think momentum is a big part of this and I think, you know, frankly, I personally think the crypto environment and stable coins included and even tokenization, momentum is so much on our side of that direction and that’s partly because you’re seeing the US, the largest economy in the world, has been pretty openly hostile towards facets of crypto and blockchain technologies and that has shifted dramatically, you know, starting with the White House but certainly, you know, the work that the industry based in the US has come together and helped elect a much more pro-crypto, pro-innovation Congress and you’re seeing that play out.

So, I think momentum is a big part of this and, you know, continuing to make sure that we’re playing into that in a nice way but also demonstrating real results because, look, if this is just hype, you know, I think part of the tokenization topic, the main topic today, part of that is, like, we shouldn’t tokenize everything just to tokenize something.

There has to be a positive outcome of efficiency or, you know, Transparency or you know some of the root benefits of being tokenized otherwise it’s just like okay it’s a nice science experiment. I’m surprised no

Karen Tso

one’s throwing democratization of the market to me and that’s typically the argument when we have some sort of innovative approach to an asset class. Valérie do you want to come in on this and the perspective that you have because today as we talk about real-world assets there is a huge switch towards alternatives and you’re looking at what that means in terms of access to some of

Valérie Urbain

those products. Absolutely and frankly coming back on the point on trust we can just wanted also to bounce back on that. I think also as the market mature I mean people are looking also for you know trusted party who can really continue to bring safety for the market but they’re also looking for institutions which are bridging different zones you know different pools of liquidity and this is where a financial market infrastructure starts playing a role because indeed we need to first see how the market is emerging but then when we are starting to reach a certain level of maturity then indeed having a financial market infrastructure which can allow interoperability between different pools of liquidity but also with a traditional finance has a lot of value and to come back on your point about alternatives it is indeed correct that the market is in search of investment products which are meeting more their needs maybe sometimes traditional finance has not evolved sufficiently fast to really attract those investors and I do see as well tokenization but also alternative to be a way to increase the attractiveness of the European capital markets.

Typically we know that we have lots of European savers but not investors and having instruments which are really addressing their questions in terms of risk profile but also in terms of access ease and ease of access will certainly be good as well for for the European Capital Market.

So, alternative tokenization, you know, as you were saying, complementarity between the Bitcoin and the traditional finance. I think all of that, I think, is good for the growth of the financial markets.

Karen Tso

The attractiveness of the asset also, in some parts, comes down to yield. And it’s funny, you know, gold’s been so attractive, but doesn’t pay a yield. There’s a fight brewing stateside around regulation.

And I know, Brian, you’ve had issues with the Clarity Act, and now it’s stalled thanks to some of your opposition. You’ve been talking about whether there should be a reward paid for some of these tokenized assets, almost like a dividend. Just explain that notion to us, because the Chinese are pushing ahead with a revamped yuan that pays some sort of a dividend.

Why is it necessary, in your view? Is it just pushing the agenda

Brian Armstrong

for Coinbase, or is it good for consumers? Yeah, so the legislation in the US has been making good progress on market structure. And I wouldn’t say it’s stalled.

I’d say there’s a good round of negotiation happening. And so I think that that’s positive. What we shared publicly was that we want to make sure any crypto legislation in the US does not ban competition for traditional financial services, banks, or traditional securities brokerages.

And in our reading of the draft, that’s what it did. It actually unfairly penalized crypto companies. We think they should be able to compete on a level playing field.

And when there’s competition, that’s how, you know, the consumer benefits. And I think there’s very forward-thinking bank CEOs, like Bill Winters and others, that have just really been leaning into this as an opportunity. They recognize change is, you can think of it as a threat, or you can think of it as an opportunity.

So the smartest bank CEOs are leaning into this. Some of their lobbying organizations in DC are trying to put their thumb on the scale and ban their competition, which I have zero tolerance for. So we’re going to speak up if we ever see that happening.

But yeah, I think there’s two main reasons why, in this case, the main debate is around stablecoins paying rewards. First, it just puts more money in consumers’ pockets, right? So I think people should be able to earn more money on their money, right?

That’s the high level. It’s also about global competitiveness, though, like you said. China did just come out recently and say that their central bank digital currency is going to pay interest, okay?

And then there are offshore stablecoins that are actually larger than the U.S. regulated ones right now, and they would love it if U.S. stablecoins were banned from paying rewards because it allows them to flourish offshore.

So from a U.S. legislator point of view, they should be ensuring U.S. regulated stablecoins are competitive.

It’s the same thing from a European stablecoin point of view. I hope, you know, Eurocoin and et cetera continues to grow. And we’re in a global competition.

We need to make sure that consumers benefit, and each country puts their interests first.

Karen Tso

Governor, to that point, does the digital euro need to pay some sort of an interest?

François Villeroy de Galhau

Oh, the answer is no in our case.

Karen Tso

Why?

François Villeroy de Galhau

No, no. Let me explain perhaps with a somewhat philosophical remark on this apparent opposition between innovation and regulation. Because I’m a bit fed up with this opposition, let me explain.

So this idea that Europe would be only on the regulation side and innovation only in the U.S., there is an apparent contradiction, I agree. But there is a common purpose in the long run, which is trust, and we mentioned it. Regulation without innovation, I am not interested.

I say to the central bankers it should be status quo, statism, I’m not interested. But innovation without regulation, it could create serious trust issues. Financial crises exist, and they are born sometimes of misleaded or dangerous financial innovations, and financial crises have a very high cost.

This is why we need regulation. So I think it’s common interest to find the right balance. On this question of remuneration of stable coins and or CBDC, we haven’t looked at the effect on financial stability on the banking system.

I don’t want to enter the U.S. debate. We see where the interests are, they are also private interests, they are legitimate.

But the public purpose should be also to preserve the stability of the financial system. In our case, CBDC, and especially the digital euro, is not intended to attack the banking system and its deposits. So we should be cautious on the transfers.

I strongly believe in complementarity on public-private. And this has been the monetary system for centuries. It’s a change of technology today, but it’s not a change of principle.

Karen Tso

Brad, come in on this, because you’re the innovator in the room, but you also believe in regulation.

Brad Garlinghouse

I think what’s going on in the US right now is a classic dynamic of when you create new law, it’s never going to be perfect. The dynamic within the industry and working with Congress has been, I subscribe to the idea that perfection is the enemy of good. And you can’t get to perfection.

I think Brian’s exactly right. We’re as close as we’ve ever been in providing that clarity. As some in the room probably know, Ripple lived through a five-year battle with the US government being sued because of the lack of clarity.

So we are very much an advocate of clarity is better than chaos. So, again, I think Brian’s right. We are very close.

I don’t know if we stalled or –

Karen Tso

But what about the reward side, rewards, dividends, interests? Is it necessary on stablecoins?

Brad Garlinghouse

I mean, Ripple doesn’t have as much of a dog in that fight as others in the industry. And so we – there’s others that have stronger opinions. It doesn’t directly affect Ripple’s business as much.

I agree in some ways that, like, look, competition is good. And I agree very much the idea of level playing field. Now, I also think a level playing field goes two ways in that crypto companies should be held to standards.

Bill Winters

I think, if I could be very simplistic about it, I think tokens are going to be used for two things. They’ll be used as a medium of exchange, no particular need to bear interest for a medium of exchange, because they’ll be instantly transmitted, and they’ll be used as a store of value. And as a store of value, they’re much less interesting if they don’t carry a yield.

But there will be tokens that are called sable coins, there will be tokens that are called tokenized bank deposits, which will probably bear yield, and there will be tokens that are called tokenized money market funds, which will definitely bear yield, that’s the whole point.

Right now, stable coins are big and liquid, super. The CBDCs don’t exist yet in a commercial scale, maybe they will, I hope they will, in the right form. And tokenized money market funds, which we’ve issued in currencies like Hong Kong dollars, or eventually it’ll be CNH, Chinese currency, will exist, and they will be useful as a store of value.

Our research estimates, everybody’s got their own numbers, and maybe we’ll get to three trillion dollars of outstanding stock of stable coins in the next three or four years. The bulk of that is going to be in developing economies where there’s lack of confidence in the local currency, and stable coins, of whatever form, could be Bitcoin, will be used as a store of value. Bitcoin’s quite volatile, everybody knows that the US dollar is the US dollar, you like it, you don’t like it, but you know what it is, so that money is going into stable coins today.

It may go into tokenized money market funds in the future, if they’re available, and if they’re bearing yield. Frankly, we don’t care. As a bank, we don’t care.

We want our customers to get the best thing for them. So if it’s a medium of exchange, we want to provide them with the entry point and the exit point. And we do that today.

They like us for it, and we’ll keep on doing that. When it comes to store of value, especially in emerging markets, got to be compliant, right? I mean, there’s probably a black market transaction someplace that gets that local currency out of the local currency into US dollars.

Sometimes it’s legit. Sometimes it’s not. That’s always been an issue.

And as a bank, we’re a policeman. That’s our job, is to try to prevent that. Unfortunately, banks don’t prevent most financial crime.

Karen Tso

Valérie, come in on this, because we’ve spent all week talking about European competitiveness, and if we’re talking about different regulation, different approaches here, is Europe going to be left behind?

I’m an optimistic person, and I’m a European.

Valérie Urbain

Well, I don’t think that Europe will be left aside, but Europe has to accelerate. I think 25 has been a year where everybody realized that there is a need indeed for fair competition, for a level playing field, but also for acceleration in innovation. And I think there is a willingness in Europe to do so.

And again, in my field, which is securities business, well, you were clear as a global footprint. We have been pioneering on the issuance of digital assets about four years ago. We start also seeing the value of tokenization for probably collateral management, because one of the, I think the thing that we are really adding to the financial market is liquidity.

And if you can start, you know, increasing the liquidity, the movement of the collateral management through different pools of liquidity, that will also again benefit the whole capital markets. So to your point, no, I think Europe has to indeed innovate faster. But at the same time, I think there are a number of banks, a number of financial market infrastructure, there are a number.

of players who are definitely willing to be part of that game, and we will be at the rendezvous.

Karen Tso

Just a quick one, Brian, before we open up to the audience. Is there a geopolitical element here? You’ve got so many stablecoins backed by US dollars.

You’ve got the yuan moving at pace as well. The reality of the future, there’s more transactions in both of these currencies bypassing other elements. Does that have consequences for the relevance of, say, the euro and other

Brian Armstrong

currencies? I do think that they’re in global competition. Absolutely.

China, US, Europe, going down the list, Japan. I mean, in some ways, Europe is ahead of the US because they passed MECA legislation. So they have comprehensive crypto legislation, while the US only has about half of it done right now with the Stablecoin Act.

And we’re now working on market structure. So Europe is ahead, but the vast majority of stablecoins are actually US dollar backed still. And so, you know, when I meet with leaders in Europe, I basically encourage them to move faster, allow some of these things like rewards on stablecoin, which is different than interest and yield, that would allow them to be globally competitive.

So I do think Europe, I’d like to see them move faster on European stablecoins.

Karen Tso

Governor?

François Villeroy de Galhau

No, I think on this question of sovereignty and geopolitical balance, first, we are all from advanced economies. And this is perhaps missing in the panel, because this development of tokenization, you mentioned it, Bill, is probably an increasing challenge for some developing countries or emerging economies, because it could mean a full dollarization.

Let me put it this way. On the other side, it will bring serious economies, costs, savings on the cross-border business. And this is a huge benefit, I hope, for the developing world.

But here, obviously, the worry about tokenization is bigger in the south, to put it up. And we had discussion in the G20 by some very important emerging countries, emerging powers. are saying we should forbid cryptos, which I think it’s not a good solution.

We would lose innovation, but be aware there is an issue. If I may add two other points. On your point, Brian, I agree that tokenisation is probably an accelerator of the diversification of the monetary system and diversification of currencies.

At present, most stable coins are in dollar for a very simple reason. It’s linked to the main use case, which is crypto exchanges. But if we come to financial transactions and still more to economic transactions, your prediction, Bill, I would be ready to bet for 28 for financial transactions, not less for economic, but we’ll see.

But if we move to these other use cases, we will have this diversification. And here infrastructures will matter much. I agree with Valérie.

This APIA project I mentioned is ready to ID to build an integrated infrastructure in the European market. It will accelerate capital markets union.

Karen Tso

Now, I’m going to take some questions from the floor. So, if you do have a question, just put your hand up and we’re going to bring a microphone down to you. But just in the meantime, to our online audience, remember you can get involved, hashtag WEF26.

I think we’ve got a microphone here in the front. If you want to pitch a question directly to anyone on the panel, please feel free.

Audience

Yes. Oh, stand up? Okay.

So, hello. Thank you very much. Fantastic panel.

My name is Fernando. I’m the chief economist of a big Brazilian bank. So, my point is, what do you think would happen with credit leverage, with duration transformation and monetary policy in a world where stable coins win the game?

Let’s say it this way. Just would love to hear yours. Thank you.

Karen Tso

Governor?

François Villeroy de Galhau

Very simple question. You come from a Brazilian bank. You said Brazil is a very…

interesting example where, as you are aware, at present the Brazilian Central Bank developed a fast payment system which is probably the most efficient worldwide with PICS. And there is now the idea of extending this infrastructure also to a kind of CBDC with DREX. So if stable currency only wins the game, this would mean, it’s an extreme case, that money would be completely privatized.

I wouldn’t be completely reassured, to use a euphemism. We had in the past, again, technology doesn’t change the philosophy. We had example in the past where money was completely private.

Without a serious central bank, take what existed in the US in the 19th century under your control. And there was no real Fed or central bank and there were many crises of confidence. So I don’t say at all that central bank currency will be dominant, will have a significant market share, but it’s an anchor of confidence.

And it’s why I insist so much on complementarity. I think it’s the interest of stable coins to be fully equivalent at par, one-to-one, without fees, to a central bank currency.

Karen Tso

Brian, come in quickly so we can take another question too.

Brian Armstrong

Yeah. I would just say, in a world where stable coins grow to that extent, I wouldn’t say that they’re entirely private money. I mean, in the US, at least under the Genius Act, all the stable coin reserves have to be held in short-term US treasuries.

So they’re really backed by US treasuries, but they privately issued the token. And then I think what will happen is, you mentioned the transformation or maturation comet. I think that in that world, you’re going to have companies that just have a 100% reserve of people’s money held in US treasuries.

There’s not going to be a concept of fractional reserve if they don’t want to get licensed as a bank, right? And so what does that mean? It means people can earn rewards on…

those stable coin balances. But if they want to earn a higher return, the customer can opt in to lending out their money. And then, you know, that’ll have to pay a higher rate than what they could get in short term US Treasuries.

So it actually flips the banking

Audience

model a little bit. It’s on its head. Right.

Another question here, a much more basic question, unless I’m mistaken, tokenization built on blockchain technology, blockchain technology requires compute and electricity, given the fact that we already have an issue in terms of having enough capacity to cover all the AI that’s coming down on us.

How are we going to cover all the tokenization that’s coming down on us? Brad, is that one for you? Sure.

Brad Garlinghouse

I’ll comment briefly. Not all layer one blockchains are created equal. Some use, as you’re describing, proof of work.

Some use proof of stake. Some use other consensus models. So I wouldn’t uniformly put all of the kind of blockchain infrastructure in kind of one power lens.

And so I don’t think it’s as big as a deal. And what you’re seeing is most of the activity of stable coins today is on more power efficient blockchains, either use proof of stake or

Brian Armstrong

a consensus mechanism. Just to add to that, proof of stake uses 99.9% less energy than proof of work, which most of the tokenization is happening on Ethereum blockchain, which

Audience

uses proof of stake. Another question here. I’m the founder of the largest payments company in Latin America that’s non-bank.

I see a lot of countries in the global south that don’t control their own currency. Why haven’t they been on chain already? And what do you think needs to happen to move their whole payment infrastructure to the blockchain and perhaps to have stable coin replaced like the dollars they use locally?

Who wants to

Bill Winters

take that one? They haven’t because of the sovereignty concern. And I think most developing economies are so.

Not all. Obviously, there’s some examples of countries that have gone entirely digital. over a period of time.

I mean, we’re struggling with that right now. So, anyway, but you guys

Karen Tso

are experts and you’re dealing with it. Can I only add on a positive note, I completely agree with what Bill just said, that many of these emerging countries and still more developing economies are very innovative in fast payment systems. So, they are more on the infrastructure side than the currency side itself.

But I’m impressed by the fact that advanced economies are not the most innovative in fast payment systems. Because it’s not the only example. Take UPI in India, take South Africa.

There are very interesting things happening on the payment systems. Right. I want to push on to an issue that impacts Western markets, developed markets, emerging markets.

If we have more fractional ownership, does that drive speculation? Because we’ve seen it in many areas where there’s fractional ownership. You’ve seen it in the retail investor getting involved in many places.

Escalation of that asset class. You think about single homes and there was an announcement recently from the President trying to keep up institutional ownership. And if you put that together, was that a preemptive strike ahead of some of the changes that are coming in tokenization?

Brad, do you want to touch on that? Does it provoke more speculation in asset classes? And where does that leave the average owner?

Well, you’re choosing the word speculation.

Brad Garlinghouse

I subscribed to Brian Armstrong’s comment earlier of like opening up investment access and investment versus speculation. I put it in kind of two different buckets. They both have a purpose.

They both have active market participants. But I think the opportunity around tokenization for certain verticals is, in fact, the democratization of access to investment, less so on the speculation side. I don’t know enough about Trump’s decision to make steps towards banning institutional investment in residential real estate to comment there.

But I do think if you want economic exposure, investment exposure to a commercial building in Miami and you have 10,000 U.S. dollars, you can’t do that today. And I think opening that up, and I know Brian’s example is even better because it’s the many billions of adults who don’t have any access.

My example is not perfect for that, but you get the point. Bill? Investments or speculation,

Bill Winters

two sides of the same coin versus transparency. So, when you have in a fractionalized world, you’d have much more transparency. Transparency is typically good for systemic stability in the long run, although it can lead to bubbles or bouts of short selling that induce volatility.

On balance, I think we’ve had nasty financial crises. They’ve been when they’ve been problems that some in the market have seen but couldn’t act on and couldn’t normalize that. So, I would always vote for transparency.

Fractionalization should lead to transparency. Governor, 10 seconds.

François Villeroy de Galhau

No, just to say that yes to increase access to investment, as you said, but it must go along with increased awareness. of risk, and this is the question of advice by the financial industry to say customers and financial literacy. So it should go together.

If not, it could be a catastrophe at the end.

Karen Tso

Valerie, I completely agree.

Valérie Urbain

I think it’s two sides of the same coin. I think it’s also according to the risk profile of the people. But access doesn’t mean speculation necessarily.

Brian Armstrong

I’ll take a different take, which is I think the top ten fiat currencies of the world will have enough trust to persist, and the next 100 should either get dollarized or replaced by Bitcoin.

Karen Tso

And on that note, we are right to time. Thank you so much.

François Villeroy de Galhau

We are definitely missing a developing country.

Karen Tso

Thank you so much to our terrific panelists. We do appreciate you, Wagan. I think we’ve all learned a lot about tokenization.

So we do appreciate it. Remember to get involved. Hashtag WEF26.

Although I’m not sure if we’re still hashtagging anymore. Brad, are we still hashtagging? We’re still hashtagging.

OK, we’re still hashtagging. Thank you so much for joining us. Thank you.

François Villeroy de Galhau

Speech speed

143 words per minute

Speech length

– Brian Armstrong
– Brad Garlinghouse

Agreed on

Regulation and innovation must work together, not in opposition

Disagreed with

– Brian Armstrong
– François Villaroy de Galhau

Disagreed on

Regulation vs Innovation Balance

CBDCs are necessary to prevent privatization of money and loss of sovereignty, especially for emerging countries

Explanation

The Governor warns that without central bank digital currencies, countries risk losing monetary sovereignty as private stablecoins, particularly those issued by American companies, could dominate their monetary systems. This concern is especially acute for emerging economies that may lack the infrastructure to compete.

Evidence

References to the triangle of threats including privatization of money and loss of sovereignty, particularly for emerging countries

Major discussion point

Monetary Sovereignty and Central Bank Digital Currencies (CBDCs)

Topics

Economic | Legal and regulatory

A two-tier monetary system is needed with public central bank money as anchor alongside private tokenized currency in euros

Explanation

The Governor advocates for a complementary system where central bank money serves as the foundational anchor while private tokenized currencies operate alongside it. He stresses the importance of having euro-denominated private tokens rather than only dollar-based ones to maintain European monetary sovereignty.

Evidence

References to the need for both stablecoins in euros and tokenized deposits in euros, warning about concerns if Europe has neither

Major discussion point

Monetary Sovereignty and Central Bank Digital Currencies (CBDCs)

Topics

Economic | Infrastructure

The euro is not in danger from a Bitcoin standard because monetary policy and money are part of democratic sovereignty

Explanation

The Governor rejects the concept of a Bitcoin standard, arguing that monetary policy is fundamentally tied to democratic governance and sovereignty. He believes that while private money has always existed alongside public money, the public anchor remains essential for democratic societies.

Evidence

References to money being a public-private partnership for centuries and the importance of public role in democracies

Major discussion point

Monetary Sovereignty and Central Bank Digital Currencies (CBDCs)

Topics

Economic | Legal and regulatory

Disagreed with

– Brian Armstrong
– François Villaroy de Galhau

Disagreed on

Bitcoin Standard vs Fiat Currency Sovereignty

The digital euro should not pay interest to preserve financial stability and avoid attacking the banking system

Explanation

The Governor explains that the digital euro is designed to complement rather than compete with the existing banking system. Paying interest on the digital euro could destabilize banks by encouraging massive transfers from bank deposits, which would undermine the financial system’s stability.

Evidence

Brian Armstrong

Speech speed

191 words per minute

Speech length

Global Competition and Geopolitical Implications

Topics

Economic | Legal and regulatory

Bill Winters

Speech speed

193 words per minute

Speech length

1005 words

Speech time

311 seconds

Most transactions will be tokenized by the end state, with digital settlement becoming the norm for real assets

Explanation

Winters predicts that the financial system is moving toward a future where most transactions will settle in digital form, including real assets. While acknowledging uncertainty about the timeline and regulatory complexity across multiple jurisdictions, he sees this as the inevitable direction of travel for the industry.

Evidence

References to operating in 60+ countries with different regulatory regimes and the direction of travel being heavily influenced by regulation

Major discussion point

Tokenization’s Current State and Future Potential

Topics

Economic | Infrastructure

Agreed with

– François Villeroy de Galhau
– Brian Armstrong
– Valérie Urbain
– Brad Garlinghouse

Agreed on

Tokenization brings significant benefits to financial markets through efficiency gains and broader access

Banks bring embedded trust to the system through aggressive regulation, making them essential custodians of tokenization infrastructure

Explanation

Winters argues that banks have earned trust through extensive regulation following past misdeeds, making them natural partners for tokenization initiatives. He emphasizes that both the instruments and the infrastructure must be trusted, and banks can provide that trusted infrastructure component while leveraging new tokenized instruments.

Evidence

Valérie Urbain

Speech speed

155 words per minute

Speech length

756 words

Speech time

292 seconds

Tokenization allows reaching a bigger range of investors and provides financial inclusion while reducing time to market and issuance costs

Explanation

Urbain argues that tokenization represents an evolution of financial markets that expands access to a broader investor base, promoting financial inclusion. She also highlights benefits for issuers through reduced time to market and lower issuance costs, making the system more efficient for all participants.

Evidence

Agreed with

– François Villeroy de Galhau
– Bill Winters

Agreed on

Trust is fundamental to the success of tokenization

Access to investment doesn’t necessarily mean speculation – it depends on investor risk profiles

Explanation

Urbain distinguishes between providing investment access and encouraging speculation, arguing that tokenization can serve legitimate investment purposes when matched to appropriate investor risk profiles. She sees access and speculation as two sides of the same coin rather than inherently linked concepts.

Evidence

References to access not meaning speculation necessarily and it being according to the risk profile of people

Major discussion point

Democratization vs Speculation Concerns

Topics

Economic | Development

Brad Garlinghouse

Speech speed

178 words per minute

Speech length

857 words

Speech time

288 seconds

Stablecoin transactions grew from $19 trillion in 2024 to $33 trillion in 2025, demonstrating massive momentum

Explanation

Garlinghouse provides concrete evidence of tokenization’s rapid growth by citing the 75% increase in stablecoin transaction volume between 2024 and 2025. He uses this data to demonstrate that tokenization, particularly through stablecoins, has significant momentum that he expects to continue.

Evidence

Agreed with

– François Villeroy de Galhau
– Brian Armstrong

Agreed on

Regulation and innovation must work together, not in opposition

Most tokenization activity occurs on energy-efficient blockchains using proof of stake consensus mechanisms

Explanation

Garlinghouse addresses energy consumption concerns by explaining that different blockchain technologies have varying energy requirements. He notes that most stablecoin activity today occurs on more energy-efficient blockchains that use proof of stake or other consensus mechanisms rather than energy-intensive proof of work.

Evidence

References to not all layer one blockchains being created equal and most stablecoin activity happening on more power efficient blockchains using proof of stake

Major discussion point

Infrastructure and Technical Considerations

Topics

Infrastructure | Development

Agreed with

– Brian Armstrong

Agreed on

Energy efficiency concerns about blockchain can be addressed through technology choices

Democratization of investment access should be distinguished from speculation, both serving different market purposes

Explanation

Garlinghouse differentiates between democratizing investment access and speculation, arguing that both have legitimate roles in markets. He focuses on tokenization’s potential to provide investment exposure to assets that were previously inaccessible to smaller investors, such as commercial real estate.

Evidence

References to opening up investment exposure to commercial buildings for people with $10,000 who can’t do that today

Major discussion point

Democratization vs Speculation Concerns

Topics

Economic | Development

Karen Tso

Speech speed

192 words per minute

Speech length

Democratization vs Speculation Concerns

Topics

Economic | Development

Audience

Speech speed

166 words per minute

Speech length

Monetary Sovereignty and Central Bank Digital Currencies (CBDCs)

Topics

Economic | Legal and regulatory

Moderator

Speech speed

0 words per minute

Speech length

Democratization vs Speculation Concerns

Topics

Economic | Development

Agreements

Agreement points

Tokenization brings significant benefits to financial markets through efficiency gains and broader access

Speakers

– François Villeroy de Galhau
– Brian Armstrong
– Bill Winters
– Valérie Urbain
– Brad Garlinghouse

Speakers

– Brian Armstrong
– Brad Garlinghouse

Arguments

Not all blockchains are equal in energy consumption – proof of stake uses 99.9% less energy than proof of work

Most tokenization activity occurs on energy-efficient blockchains using proof of stake consensus mechanisms

Summary

Both speakers agree that energy consumption concerns about tokenization are addressable through choosing more efficient blockchain technologies like proof of stake

Topics

Infrastructure | Development

Economic | Legal and regulatory

Economic | Legal and regulatory

Overall assessment

Summary

The panel showed remarkable consensus on tokenization’s benefits, the need for balanced regulation, the importance of trust, and the reality of global competition. Key agreements included tokenization’s positive impact on financial inclusion and efficiency, the complementary rather than competitive relationship between regulation and innovation, and the necessity of maintaining trust through proper frameworks.

Consensus level

High level of consensus with constructive disagreement mainly on specific implementation details rather than fundamental principles. This suggests tokenization has moved beyond the experimental phase toward mainstream acceptance, with focus shifting to how rather than whether to implement it. The broad agreement among diverse stakeholders (central banker, traditional bank CEO, crypto executives, infrastructure provider) indicates strong momentum for tokenization adoption with appropriate safeguards.

Differences

Legal and regulatory | Economic

Unexpected differences

Democratic Control vs Decentralized Independence

Speakers

– Brian Armstrong
– François Villaroy de Galhau

Arguments

Bitcoin represents a return to sound money and inflation-resistant currency as democracies struggle with deficit spending

The euro is not in danger from a Bitcoin standard because monetary policy and money are part of democratic sovereignty

Explanation

The disagreement reveals a fundamental philosophical divide about whether democratic control over money is beneficial or problematic – Armstrong sees democratic deficit spending as a flaw requiring decentralized alternatives, while the Governor sees democratic control as essential to sovereignty

Topics

Economic | Legal and regulatory

Trust Through Regulation vs Trust Through Decentralization

Speakers

– Brian Armstrong
– Bill Winters
– François Villaroy de Galhau

Arguments

Bitcoin is a decentralized protocol. There’s actually no issuer of it. So that’s, in the sense that central banks have independence, Bitcoin is even more independent

Banks bring embedded trust to the system through aggressive regulation, making them essential custodians of tokenization infrastructure

Regulation is not the enemy of innovation but a guarantee of trust, requiring the right balance between innovation and regulation

Explanation

Unexpected disagreement on the source of trust – Armstrong argues decentralization provides superior trust through elimination of human control, while Winters and the Governor argue institutional trust through regulation is essential

Topics

Legal and regulatory | Economic

Overall assessment

Summary

The main disagreements center on the role of regulation versus innovation, the desirability of a Bitcoin standard versus fiat currency sovereignty, and whether stablecoins should pay rewards. There are also fundamental philosophical differences about democratic control over money and the source of trust in financial systems.

Disagreement level

Moderate to high disagreement on fundamental principles, but strong consensus on tokenization’s benefits. The disagreements reflect deeper ideological divides about the role of government, regulation, and decentralization in finance, which could significantly impact policy development and implementation strategies for tokenization.

Partial agreements

Economic | Legal and regulatory

Takeaways

Key takeaways

Tokenization is at a major inflection point in 2026, with momentum building across banks, asset managers, and crypto players after years of quiet development

Stablecoins have emerged as the first successful poster child of tokenization, with transaction volumes growing 75% from $19 trillion in 2024 to $33 trillion in 2025

A two-tier monetary system is essential, combining public central bank money as an anchor with private tokenized currencies to maintain both innovation and sovereignty

Tokenization promises democratization of investment access for approximately 4 billion adults worldwide who currently lack access to high-quality assets

Trust and regulation are fundamental requirements for tokenization success, with Europe’s MECA and the US’s Genius Act providing necessary frameworks

The European Union is pioneering wholesale CBDC development through the PONTES project, positioning itself as a global leader in this space

Different types of tokens serve different purposes – medium of exchange tokens don’t require interest, while store of value tokens should bear yield

Tokenization will accelerate monetary system diversification beyond current US dollar dominance as use cases expand from crypto exchanges to broader financial and economic transactions

Resolutions and action items

France, holding the G7 Presidency, has placed innovative finance and tokenization on the agenda for discussion and coordination

European Union will launch the PONTES pilot wholesale CBDC project this year, followed by the more comprehensive APIA project with European ledger

Euroclear is implementing a commercial paper tokenization initiative in France covering 300 billion euros to test full market ecosystem migration

The US crypto industry continues negotiations on comprehensive legislation, working toward clarity on market structure and stablecoin regulation

Financial institutions need to accelerate innovation while maintaining regulatory compliance across 60+ different regulatory regimes globally

Unresolved issues

Whether tokenization use cases will extend from financial transactions to domestic economic transactions including retail remains uncertain

The debate over whether stablecoins should pay rewards/interest continues, with competing views on consumer benefits versus financial stability

How to balance innovation with regulation across different jurisdictions while maintaining global competitiveness is ongoing

The extent to which developing countries will adopt tokenization versus maintain sovereignty concerns over currency control

Whether Europe can accelerate innovation sufficiently to compete with US and Chinese developments in tokenization

How to manage the potential for increased speculation versus democratization as fractional ownership expands

The long-term coexistence model between Bitcoin standard advocates and traditional fiat currency systems

Energy consumption concerns for blockchain infrastructure as tokenization scales alongside AI computing demands

Suggested compromises

Complementary roles between CBDCs and private stablecoins rather than winner-take-all competition

Public-private partnership approach to monetary systems, maintaining public anchor while enabling private innovation

Level playing field regulation that allows fair competition between traditional banks and crypto companies without unfair advantages

Interoperability between different pools of liquidity and traditional finance through trusted financial market infrastructure

Gradual migration approach starting with smaller markets (like commercial paper) to learn lessons before broader implementation

Different token types serving different purposes – some for medium of exchange, others for store of value with appropriate yield structures

This historical perspective is thought-provoking because it uses past monetary crises to argue for the necessity of public monetary anchors. The Governor effectively argues that the current debate isn’t unprecedented and that history shows the dangers of purely private monetary systems.

Impact

This comment provided historical context that grounded the futuristic discussion in proven economic principles. It helped establish why complementary systems rather than replacement systems make more sense, influencing how other panelists framed their subsequent arguments about coexistence rather than competition.

Overall assessment

Explanation

The Governor suggested tokenization could accelerate currency diversification, requiring research on geopolitical and economic implications of this shift.

Disclaimer: This is not an official session record. DiploAI generates these resources from audiovisual recordings, and they are presented as-is, including potential errors. Due to logistical challenges, such as discrepancies in audio/video or transcripts, names may be misspelled. We strive for accuracy to the best of our ability.