New CEPR Policy Insight: Crypto, Tokenization and the Future of Payments

Our new CEPR Policy Insight examines how three key technological innovations—blockchains, distributed ledgers, and tokenization—could reshape the future of finance. We review the current state of the crypto ecosystem, including its internal payments infrastructure, legitimate and illicit uses, and the reasons why crypto has failed to gain traction as a mainstream payments tool. We then turn to U.S. policymakers’ efforts to promote a “payments stablecoin,” considering the goals of an efficient and safe payments system and the barriers that stand in the way. Finally, we compare stablecoins with tokenized deposits and money market funds that replicate familiar financial assets in digital form but have received far less policy attention. We conclude that stablecoins are unlikely to compete effectively outside the crypto world against these no-less-digital instruments.

A short version also is available as a voxEU column.