By Victory Adugbo.
For years, central banks have viewed tokenization as a distant experiment, an interesting concept unfolding in the “crypto world,” but not a material force within regulated finance. That assumption is now obsolete.
Tokenization is rapidly moving into the core of traditional finance: government bonds, money market funds, treasuries, private credit, commercial paper, and even institutional settlement flows. What began as a technological curiosity is fast becoming the operating fabric of global markets. Yet many central banks still misinterpret tokenization as a threat, a parallel system designed to weaken monetary control or fragment policy channels.
The reality is the opposite:
The real risk for central banks is not the rise of tokenized markets. It is being absent from their design.
Tokenization isn’t speculation. It’s infrastructure.
Additionally, early regulators are always rewarded by infrastructure, not those who compete from the sidelines.
Tokenization strengthens, not weakens, monetary sovereignty.
Central banks that participate gain visibility, influence, and policy leverage.
Those that resist risk losing all three.
Why Tokenization Is Becoming Core Infrastructure.
Tokenization is no longer a startup experiment, it has become an institutional transformation led by the world’s largest financial firms. BlackRock’s tokenized Treasury fund (BUIDL) is now one of the largest on-chain funds globally.
JPMorgan’s Onyx platform is building tokenized collateral networks for real-time settlement. HSBC has launched tokenized gold products and institutional-grade digital custody. Asset managers like Franklin Templeton, WisdomTree, and Wellington are rolling out tokenized money market funds with daily liquidity. The world’s financial plumbing is being rebuilt in real time.
Data already confirms the 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.”
Competition is a losing strategy for central banks because it leads to liquidity fragmentation, and institutions will always migrate toward the deepest pools of liquidity, whether on public chains or consortium networks, rather than use parallel rails.
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 costs, 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. While competition is counterproductive, participation is strategic.
Participation Protects the Currency
The main point of contention is that exclusion from monetary sovereignty poses a greater threat than tokenization. Regardless of central bank involvement, millions of users transfer digital dollars across blockchains every day, demonstrating the global movement of tokenized USD assets. In many emerging economies, USD stablecoins now serve as "shadow digital dollars," acting as a settlement layer and a store of value. Ignoring them does not lessen their influence; rather, it increases it.
Tokenized treasuries, on the other hand, have produced parallel financial systems with instantaneous settlement, higher yields than domestic savings accounts, and no need for middlemen. Without participation, domestic currencies risk being bypassed entirely as users migrate toward tokenized USD instruments that are more liquid and more accessible. True sovereignty now depends on interoperability: to supervise flows, enforce AML rules, maintain FX liquidity, and manage cross-border capital, central banks must operate on the same digital rails where value is already moving.
A currency that cannot integrate is a currency that becomes irrelevant. Africa, in particular, can leapfrog by building digital-first clearing infrastructure, tokenizing land registries, carbon credits, and agricultural commodities, creating transparent issuance markets for SMEs, attracting diaspora capital into on-chain government instruments, and reducing reliance on dollar stablecoins through credible domestic tokenized assets.
Without the hassle of outdated systems, the continent has the chance to develop contemporary market infrastructure right away.
Participation is not optional.
It is a continental advantage.
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