Digital Finance, Tokenisation and the Future of Money

Money has always been more than coins and notes. It is both a measure of value and a system of trust, evolving through history to meet the changing needs of society. From clay tokens in ancient Mesopotamia to blockchain-powered digital currencies today, the story of money is one of constant reinvention driven by human progress. In this article we explore how tokenisation and digital finance are reshaping the global financial system, enabling faster transactions, programmable value and new geopolitical dynamics. But to understand where money is going, it helps to remember where it began.

From Clay Tokens to the First Ledgers

Thousands of years ago in ancient Mespotania, which is now, modern day Iraq, communities needed a way to record transactions. Clay tokens were created to represent items of value; a sheep, a cow or even a measurement of grain. These tokens didn’t hold intrinsic value but were merely a standardised unit of count. Even the word “money” carries this history: the Latin “pecunia” derives from “pecus”, meaning cattle.

To prevent tampering, these tokens were fired in “kilns” In a sense this was one of the world’s first forms of fraud protection or an early kind of cryptography. A token couldn’t be altered once it had hardened. These small clay tokens effectively carried the same purpose that digital tokens now serve such as proof of value, trust in exchange and record keeping.

When Money Became Metal

Some thousand years later, in Greek city states, money took on a new form. Coins made of gold or silver were standardised by weight and stamped with the insignia of the issuing city. Unlike the earlier clay tokens these coins had intrinsic value due to the precious metals they were made from. They were especially useful for paying mercenaries who needed portable wealth that could be trusted outside of their hometowns.

This shift marked a significant evolution. Where earlier money systems were linked to credit and trust in institutions, money was now tied to physical substance.

Abstraction of Value

Fast forward to more recent centuries and money evolved again. The British pound sterling originally represented a literal pound of sterling silver which was divisible into shillings and pennies. Over time, these physical links dissolved. Coins and banknotes became abstractions backed by governments rather than metal.

This marked another significant shift. Money transitioned from physical value to a representation of value. By detaching from commodities like gold or silver, modern currencies became reliant on trust in the issuing governments and central banks instead of tangible assets.

Each step forward in the evolution of money has followed the same pattern. Society finds a new more efficient way to record and transfer value and trust slowly shifts to the new system.

Digital Tokenisation

Today tokenisation promises to do for finance what clay tokens did for ancient traders. Instead of cattle or precious metals, we now represent assets like property, shares, commodities or even art through digital tokens powered by blockchain technology or digital rails.

Money itself can also move along these “digital rails” enabling transactions that are automatically executed through smart contracts. The benefits are tangible:

Digital Tokenisation is not just about making transactions faster, cheaper and more secure. It is also about creating programmable money and programmable value. By embedding rules directly into the token (via smart contracts), entire financial processes such as dividend distribution, escrow accounts or insurance payouts, can be automated and streamlined.

Instant Settlement and its Revolutionary Impact

Instant settlement, through tokenisation and blockchain systems, promises to revolutionise global finance. This transformation eliminates inefficiencies in legacy systems, especially for cross border payments which are historically slow and expensive. With the integration of blockchain, Central Bank Digital Currencies (CBDCs) and real-time payment systems, instant settlement has the potential to become the global standard.

However, this is not without challenges. Regulatory frameworks, privacy concerns and interoperability between systems must all be addressed for widespread adoption to occur. Additionally, governments and institutions will need to balance the benefits of decentralised systems with the need for central oversight and control.

Digital Finance Today

We are now at the next transition point. Digital Finance is not only about the digitisation of currency but the complete transformation of financial infrastructure. What once relied on slow, physical processes or intermediary-heavy systems can now be executed in real time on global networks.

The Geo-political Race in Digital Finance

The evolution of digital finance is also geo-political. For decades, the U.S. Dollar has been the backbone of the global financial system. However, in recent years China has invested heavily in building its own digital financial infrastructure.

Chinas Digital Currency Electronic Payment (DCEP) also known as the digital yuan is an ambitious project aiming to reshape cross border payments and reduce reliance on the dominant international financial system, heavily controlled by the dollar. China also has built domestic digital payment eco systems like Alipay and WeChat pay which operate at scale and are deeply ingrained in Chinas economy.

Through these efforts, China is creating a self-sufficient digital finance eco-system positioning itself as a contender to challenge the existing financial order.

The Future of Money

According to the Atlantic Council, “137 countries and currency unions, representing 98% of global GDP, are exploring a CBDC,” Central Bank Digital Currency Tracker – Atlantic Council) underpinning huge transformation in global finance. Among these, China’s digital yuan remains the largest CBDC pilot in the world offering us insights into the possibilities of state backed digital currencies. It is in stark contrast to the U.S. where in January 2025, President Trump stopped all development work on a retail CBDC through an executive order.

China is leading the way by leveraging its domestic digital payment ecosystems like Alipay & WeChat pay which already operate at massive scale and provide China with the infrastructure required to integrate the digital Yuan into daily transactions. By embedding the digital yuan into its Belt and Road initiative and facilitating cross border payments at new speeds, China is positioning itself as a leader in global digital commerce and with a massive head start in the digital currency race.

A New Chapter in the Story of Money

From clay tokens to digital tokens, the journey of money tells a story of constant reinvention and provides a lookback on society’s evolving needs for trust, efficiency and inclusivity in financial systems. We are at a turning point, Tokenisation and digital finance are not just refining the mechanics of money but are fundamentally reshaping the infrastructure which underpins economic relationships.

The speed of change & geopolitical impact sets this transformation apart. As the majority of nations race to develop central bank digital currencies (CBDCs) and blockchain technologies, we are witnessing the emergence of a new world order where financial systems may no longer be defined solely by traditional power dynamics, but by technological leadership and innovation. The kitchen sink of CBDCs, cryptocurrencies and hybrid models will undoubtedly challenge assumptions about how money works and who controls it.

On this digital financial journey, challenges remain. Balancing De-Fi with government oversight, integrating new systems with legacy infrastructure & addressing risks to privacy and financial independence all remain pressing questions as we navigate the future of finance.

Ultimately, the future of money will be shaped by our ability to harness digital innovation while preserving trust, creating an inclusive financial system which empowers society and reshapes global finance for generations to come.