According to the Bank of England’s financial stability report, digital tokenization of assets may pose a risk to financial stability.
According to the report published by the Bank of England, tokenization of assets is “It could increase the connectivity between crypto assets and traditional financial assets, directly exposing systemic institutions to it.”
Banking companies are increasingly using digital token technology. A month ago HSBC worked with Metaco, which was acquired by Ripple for tokenized securities announced that it would provide storage services.
The Bank of England has stated that this technology does not yet pose a major risk, but this trend will watch over explained. In order to prevent the risks that this may pose, the central bank call for international cooperation found.