Policy Insights

Policy Insight 146: Crypto, tokenisation, and the future of payments

• Stephen Cecchetti Kermit L. Schoenholtz
22 Aug 2025

This Policy Insight examines how three key technological innovations - blockchains, distributed ledgers, and tokenisation - could reshape the future of finance. It reviews 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. The analysis then turns to US 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. The Insight compares stablecoins with alternative digital payment instruments, such as tokenised deposits and programmable money market funds, which replicate familiar financial assets in digital form but have received far less policy attention. It concludes that stablecoins are unlikely to compete effectively outside the crypto world against these no-less-digital instruments.