The Bank for International Settlements (BIS) and the Financial Stability Board (FSB) have published papers on tokenization ahead of the G20 meeting on October 23-24, 2024. As Brazil presides over the G20, discussions on digital currency have become a priority. The reports, while independently conducted, shared common themes: tokenization is considered both an emerging concept and one that poses risks akin to those in traditional finance, alongside unique challenges. The FSB noted that tokenization lacks a universally accepted definition yet highlights familiar risks inherent to existing financial systems. This emphasis on regulatory frameworks for digital currencies resonates with the recent G20 meetings, where international regulation discussions were prominent. The BIS is engaging in various tokenization projects under its Innovation Hub, collaborating with numerous central banks to explore the implications and applications of tokenization in modern finance.

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