Tokenisation and Digital Money: Two Roads to a Safer, Smarter Payments Future

As the payments industry races toward a digital future, two technologies are often mentioned in the same breath: tokenisation and digital currencies. Yet, despite their shared spotlight, understanding the distinction is essential for anyone navigating the evolving financial landscape, writes Azimkhon Askarov, Co-CEO and Partner of payments company CONCRYT.

Particularly concerning stablecoins and central bank digital currencies (CBDCs), these innovations serve fundamentally different purposes.

Tokenisation: securing the rails

Tokenisation is a behind-the-scenes technology that replaces sensitive payment data, like card numbers or bank account details, with unique, non-sensitive tokens.

These tokens are meaningless if intercepted, making them a powerful tool for reducing fraud and enhancing privacy. Today, around half of Visa’s global e-commerce transactions are tokenised, a clear signal that this isn’t a niche solution, but a foundational layer of modern payments infrastructure.

Tokenisation doesn’t change the money itself, but it does change how payment data is stored, transmitted, and protected, so at its core is a security and compliance tool.

It allows businesses to meet regulatory requirements and reduce the risk of breaches, but perhaps more importantly deliver a better customer experience across platforms and devices.

Stablecoins and CBDCs: reimagining money

If you think of tokenisation as securing the rails, stablecoins and CBDCs redefine the cargo.

Stablecoins are privately issued digital assets pegged to fiat currencies, while CBDCs are government-backed digital versions of national currencies.

These innovations aim to modernise the monetary base by enabling faster settlement, programmable payments, and potentially greater financial inclusion. Unlike tokenisation, which operates quietly in the background, digital currencies are visible and transformative.

They raise questions about monetary policy, cross-border interoperability, and the role of central banks in a decentralised financial world.

Complementary forces, not competitors

Tokenisation and digital currencies are often grouped together under the umbrella of ‘payment innovation’, but they actually solve different problems.

Tokenisation addresses data security, fraud prevention, and regulatory compliance. Conversely, stablecoins and CBDCs tackle issues of liquidity, settlement speed, and monetary sovereignty. Essentially, one is an infrastructure upgrade, the other is a redefinition of money itself.

Tokenisation helps businesses operate more securely within the existing financial system. Digital currencies propose a new system altogether.

Despite their differences, tokenisation and digital currencies are not mutually exclusive. In fact, they can reinforce each other.

Tokenisation can secure digital wallets that hold stablecoins or CBDCs, protect user credentials, and enable seamless integration across devices. Meanwhile, digital currencies can benefit from tokenisation’s portability and fraud resistance as they scale across borders and platforms.

Together, they form a layered approach to payment innovation: tokenisation fortifies the infrastructure, while digital currencies expand the possibilities of what money can do.

Looking ahead

As regulators, fintechs, and financial institutions explore the future of payments, clarity is key. Tokenisation is already a proven solution for securing transactions and enabling data portability.

Stablecoins and CBDCs are still evolving, with governance, trust, and interoperability challenges to resolve. One survey of 93 central banks found that 91 per cent are exploring a retail or wholesale CBDC, but that the work is still in exploratory or pilot phases, and design decisions remain unsettled.

Businesses that understand the distinct yet complementary roles of these technologies will be better equipped to navigate the next wave of digital commerce.

Tokenisation is not just a security feature; it’s a strategic enabler, and digital currencies are not just new forms of money; they’re catalysts for systemic change. In the end, the question isn’t which technology is ‘better’, but how they’ll work together to shape a more secure, inclusive, and dynamic payments ecosystem.