The report stated: \u201cTokenisation could dramatically enhance the capabilities of the monetary and financial system by harnessing new ways for intermediaries to interact in serving end users, removing the traditional separation of messaging, reconciliation and settlement.\u201d<\/p>\n
![\"Figure](\"https:\/\/www.europesays.com\/germany\/wp-content\/uploads\/2026\/06\/structure-of-tokenisation.png\")
<\/p>\n
Figure 1: Structure of tokenisation
Source: Aldasoro et al (2023)<\/p>\n
At its core, a token is a digital package that contains both information about an asset and the rules governing what can be done with it. As illustrated by the BIS, (see Figure 1) tokens merge two critical components:<\/p>\n
Information. Details about the asset, such as what it is, its origin, and its ownership.
\nRules. The logic defining what the asset can and cannot do, which can be enforced through smart contracts.<\/p>\n
Unlike traditional systems where the rules for updating asset ownership are generally uniform for all assets, tokenisation allows these rules to be customised to meet specific user or regulatory requirements for individual assets.<\/p>\n
As Hyun Song Shin, former BIS Economic Adviser and Head of Research who was recently announced as the 28th Governor of the Bank of Korea, put it at the launch of the project, \u201cTokenisation combines the record-keeping function of a traditional database with the rules and logic that govern transfers\u201d. He explained, \u201cWe aim to improve existing capabilities and enable new ones, all based on the proven foundations of the two-tier monetary system with central banks at the core. These functionalities will come without sacrificing the safeguards on the integrity and governance of the monetary system.\u201d<\/p>\n