Synthetic Minds | Blockchain Was Built to Escape Banks. Banks Took It.

Synthetic Minds | Blockchain Was Built to Escape Banks. Banks Took It.

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Today’s topic: Tokenization

Whoever Controls the Money Still Controls the Power

A state-owned Indian lender has sold a bond that settled against central bank money the instant it changed hands. The ledger underneath it was invented to make central banks unnecessary.

Blockchain was designed to run money outside governments and banks. Governments and banks have adopted it. Not one of them adopted the politics that came with it.

Russia has made its central bank's own digital money compulsory infrastructure for the twelve banks carrying over 80 percent of its payments.

India has put a bond and its payment on one ledger, a 500 crore rupee issue bought by roughly 20 institutions, with central bank money as the cash side.

DBS and Citi have moved dollars across the Pacific on a weekend using bank deposits issued as tokens.

Korea has published a three-stage timetable ending with privately issued digital dollars closing its stock market.

21 of the world's largest financial institutions, 17 of them systemically important banks, have agreed to build one dollar token between them rather than 21 competing ones.

That's the payments story. Here is the signal.

The whole point was to build a system outside the government. Efficiency was a side effect. Escape was the design.

Governments and central banks have taken the machinery and left the ideology on the floor. They want faster settlement, not a world without central banks.

This is not necessarily a bad thing. The benefits still get used. They get used under the control of the institutions the technology was built to bypass.

Facebook discovered this first. When it announced a global currency in 2019, within three months the Bank for International Settlements turned at least 26 central banks on it. The project never launched. Its remains sold for $182 million a few years later.

21 banks are now doing a version of what Facebook was blocked from doing. The technology has not changed. The asking party has.

Money will keep evolving, and the slow payment systems will keep improving. It will not become a fringe system controlled by nobody. The big banks and powers will never let that happen.

It may well be privatized: created, controlled and owned by banks instead of governments. That is a genuine transfer of power. It is not decentralization, and confusing the two is how boards get this wrong.

Data is a different question, and this is where capture is straightforwardly good. Making records immutable is what a data-driven world needs anyway, and it needs it most from the institutions everyone is forced to trust.

Those who control money have the power. That is precisely why truly decentralized money stays on the fringe.

The Intelligence Age Scorecard

The technology built to route around banks and governments is being deployed by banks and governments, which changes what your organization is actually adopting when it adopts it. WAVE asks which part of the cycle this demands of you: are you still watching the decentralization argument, or should you already be verifying who controls the rails your money and your records will sit on?

Benchmark your readiness for the next two quarters, and the next five years, with the Intelligence Age Scorecard.

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Thank you.
Mark