Bank

Future

In a recent tweet, Versan Aljarrah, founder of Black Swan Capitalist, <a href="https://x.com/VersanAljarrah/status/1852785600077918686">commented</a> on a video where Agustin Carstens, General Manager of the Bank for International Settlements (BIS), elaborated on the prospects of a tokenized financial future. 
Aljarrah interpreted Carstens’ remarks, suggesting that a two-tier tokenized framework could position XRP as a facilitator for global transfers and settlements and XLM as a tool for retail payments and peer-to-peer transactions. Carstens, however, made no direct mention of XRP or XLM, leading some to question Aljarrah’s interpretation. 
<h2 id="b-carstens-on-tokenization-and-innovation-b">Carstens on Tokenization and Innovation</h2> 
Carstens emphasized that tokenization—a process enabling assets to be converted into digital tokens on a blockchain or similar digital ledger—could catalyze significant financial innovation. He argued that embedding regulatory measures, cybersecurity protections, and anti-money laundering (AML) compliance within tokens could drastically streamline regulatory adherence. 
According to Carstens, the burdens associated with regulatory requirements today could be minimized in a tokenized system, which would alleviate many administrative and operational costs across the financial sector. 
The BIS’s approach to tokenization is based on the idea that a more efficient financial system can be developed by digitalizing and integrating key components such as cybersecurity and regulatory requirements. 
Carstens suggested that unifying these functions within a tokenized framework would lead to greater flexibility in the application of rules while enabling real-time monitoring of transactions. 
<h2 id="b-atomic-settlement-and-collateral-management-b">Atomic Settlement and Collateral Management</h2> 
Carstens highlighted atomic settlement as another key benefit of a tokenized system. Unlike traditional financial transactions, which may involve delays due to multiple intermediaries, atomic settlement allows transactions to be completed instantaneously. 
This innovation could eliminate the need for certain forms of collateral that traditionally serve as risk mitigants during transaction processing delays. 
In other words, by settling transactions instantly, financial institutions would no longer need to maintain large collateral reserves, thereby reducing operational costs and increasing liquidity across markets. 
<h2 id="b-the-two-tier-financial-system-b">The Two-Tier Financial System</h2> 
A core component of Carstens’ vision involves implementing a “two-tier” financial system, which essentially divides responsibilities between commercial banks and central banks. In this system, commercial banks handle routine payments and consumer transactions, while central banks oversee and support commercial bank transactions to maintain monetary stability. 
To ensure that transactions retain a “singleness of money”—where the value of a dollar or euro remains identical across institutions—the BIS advocates for the tokenization of commercial bank money and central bank money at the wholesale level. 
This structure would prevent value discrepancies between transactions conducted in different banks, as all would ultimately settle through central bank money. According to Carstens, this singleness is essential for ensuring a seamless financial ecosystem. 
Carstens noted that tokenizing central bank money may not be necessary for retail-level transactions, implying that the focus of this transformation would initially involve high-level, institutional transactions. 
The wholesale-level emphasis underscores the BIS’s commitment to maintaining stability and consistency in larger financial movements, which form the foundation of any economy. 
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<h2 id="b-aljarrah-s-interpretation-and-market-speculation-b">Aljarrah’s Interpretation and Market Speculation</h2> 
Aljarrah’s interpretation of Carstens’ statements suggests that existing <a href="https://timestabloid.com/financial-expert-shows-why-you-should-invest-in-xrp-and-xlm/">digital assets like XRP and XLM </a>could play strategic roles within this two-tiered framework. 
Aljarrah speculates that XRP might be suited for central bank-level transactions due to its liquidity optimization and settlement capabilities, while XLM could serve as a reliable tool for everyday retail transactions. 
XRP and XLM are already widely associated with cross-border and retail payment solutions, respectively, which aligns with the BIS’s dual-layer model. 
However, some in the crypto community, including a respondent in Aljarrah’s tweet thread, voiced skepticism. The commenter<a href="https://x.com/dibby29118520/status/1852934274426785948"> pointed out</a> that Carstens made no explicit mention of XRP or XLM, suggesting that central banks and commercial institutions may prefer proprietary solutions over publicly traded tokens. 
The commenter argued that while Ripple (the company behind XRP) might eventually collaborate with central banks, the token used in such a system could be exclusive to institutional participants, potentially excluding retail investors. 
<h2 id="b-bis-s-direction-and-the-future-of-central-bank-digital-currencies-cbdcs-b">BIS’s Direction and the Future of Central Bank Digital Currencies (CBDCs)</h2> 
The BIS has previously advocated for central bank digital currencies (CBDCs) as an innovative tool to strengthen monetary systems worldwide. Carstens’ discussion aligns with the BIS’s ongoing exploration of <a href="https://timestabloid.com/analyst-xrp-at-10000-is-a-logical-conclusion-with-cbdc-playing-a-major-role/">CBDCs</a>, designed to provide digital representations of national currencies, potentially tokenized for enhanced functionality and security. 
While Carstens emphasized the operational benefits of tokenization, his comments also suggest a controlled and regulated approach to financial transformation, with central banks retaining authority over core aspects of currency and payments. 
This stance implies that central banks are likely to maintain a central role in the development and implementation of digital tokens, potentially bypassing the need for public cryptocurrencies like XRP and XLM for core functions. 
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. 
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The post <a href="https://timestabloid.com/xrp-to-facilitate-global-settlements-xlm-for-peer-to-peer-transactions/">XRP to Facilitate Global Settlements, XLM For Peer-to-Peer Transactions</a> appeared first on <a href="https://timestabloid.com">Times Tabloid</a>.

XRP to Facilitate Global Settlements, XLM For Peer-to-Peer Transactions

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