In many ways, modern finance feels like it is pulling in two different directions at once. On one side, markets have never been faster; trades happen in milliseconds, algorithms reacting before people even notice what has changed. But when it comes to actually moving the money, settling trades, clearing obligations, closing the loop, it still runs on timelines that feel a bit out of step with everything else.
Settlement cycles stretch across hours, sometimes days. Systems reconcile data after the fact. Liquidity gets locked in transit. And behind it all, multiple ledgers attempt to reflect the same transaction, often requiring layers of verification to confirm what should already be known.
For decades, this worked. It was reliable, regulated, and predictable. But now, that model is being quietly challenged, not by disruption at the edges, but by a structural rethink of how money itself should move.
Financial institutions are beginning to explore something that, until recently, sat firmly in the realm of experimentation: tokenised cash and programmable money. What started as a blockchain curiosity is now evolving into a serious attempt to redesign the underlying rails of finance.
And unlike past waves of innovation, this one is not being driven solely by startups or crypto-native firms. It’s being built from within the system itself.
Why now? A system under pressure
The timing is not accidental. Across the financial ecosystem, pressure has been building. Transaction volumes are increasing. Markets are becoming more interconnected. And expectations around speed driven by digital platforms in every other industry are starting to reshape what institutions consider acceptable.
Anil Thapa, a fintech expert and data analyst based in Manchester, sees this shift emerging from a fundamental mismatch between infrastructure and demand.
“A lot of the current infrastructure is still built around older assumptions. Separate ledgers, delayed updates, and manual reconciliation between parties. That works, but it creates inefficiencies that become more obvious as transaction volumes increase and as markets demand faster execution,” he told International Finance.
At its core, the issue is not just speed: it’s duplication.
Financial institutions often end up keeping their own versions of the same data, only matching things up after the transaction is done. It’s built that way for trust, but it does slow things down.
Tokenised cash offers a different approach. Instead of each participant maintaining its own record, transactions can exist on a shared ledger, visible and verifiable in real time.
“Instead of each participant maintaining its own ledger and then reconciling later, everyone is effectively looking at the same state in real time. From a data perspective, that’s a big shift; it improves transparency, reduces duplication, and makes audit trails much cleaner,” Thapa explains.
That shift from fragmented records to a shared source of truth is one of the key forces driving institutional interest.
From concept to implementation
What makes this moment different from earlier blockchain experiments is that the conversation has moved beyond theory.
Emma Landriault, Executive Director working on JPM Coin at JPMorgan, describes a growing demand from institutional clients, not for abstract innovation, but for practical, integrated solutions.
“We see growing interest from large institutional players who want more native on-chain cash solutions from pre-eminent and reputed financial institutions. These institutions typically participate actively in both crypto and real-world asset digital transactions, which is why native on-chain deposit-based cash solutions fit well with their needs,” she told International Finance.
In other words, the infrastructure around digital assets is expanding, but without a corresponding form of digital cash, the system remains incomplete. Tokenised deposits aim to fill that gap.
Unlike stablecoins, which are typically issued by non-banks and backed by separate reserves, deposit tokens are tied directly to regular bank deposits. They operate within the same regulatory and liquidity rules as regular banking, which makes them familiar and easier for institutions to use as part of their everyday financial operations.
“A deposit token is a digital representation of a bank deposit that operates on blockchain networks, designed for institutional use cases. Institutional clients can treat deposit tokens in the same way they would treat a traditional bank deposit on their balance sheet,” Landriault explains.
That distinction matters. It means tokenised cash is not positioned as a replacement for existing systems, but as an extension, one that integrates with treasury management, accounting, and liquidity frameworks already in place.
Who is already using tokenised cash?
Several large financial institutions have already started testing, and in some cases using, tokenised cash in real-world settings.
So far, the push has mostly come from big global banks, especially on the institutional side. Use cases are showing up in areas such as cross-border payments, treasury operations, and digital asset transactions.
For instance, platforms such as JPM Coin are being used by institutional clients to move money between corporate accounts more efficiently, cutting down the time it takes to settle transactions.
This hasn’t happened overnight. The groundwork has been there for a while, but it’s really only in the last few years that things have started to pick up pace. What used to be small pilot projects are gradually turning into something more real, as the tech improves and institutions get more comfortable using tokenised cash.
The response has been fairly steady. On the inside, teams working with these systems are already noticing improvements – less time spent on reconciliation, better visibility into transactions.
For clients, particularly large ones, the appeal is straightforward: faster settlement, more control over liquidity, and the ability to plug into existing systems without having to overhaul everything.
That said, adoption is still cautious. Most institutions aren’t replacing their current systems just yet. They’re running these alongside what they already have.
Efficiency beyond speed
Much of the conversation around tokenised money focuses on speed, faster payments, instant settlement, and real-time transfers. But the more meaningful impact may lie elsewhere in how capital is used.
“In traditional systems, settlement delays mean capital is often tied up for a period of time, even after a transaction is agreed. That creates inefficiency, especially at scale,” Thapa notes.
When transactions settle instantly, capital is no longer stuck in limbo. It can be redeployed immediately, improving liquidity and reducing risk.
There’s also the question of certainty. In today’s systems, the completion of a transaction often involves multiple stages, execution, clearing, and settlement, each introducing potential delays or points of failure. Tokenised systems collapse those stages into a single, atomic process.
“Tokenised money allows transactions to settle almost instantly, and more importantly, allows both sides of a transaction to complete simultaneously. That removes a lot of the uncertainty and risk that exists today,” Thapa noted.
For institutions operating at scale, those incremental efficiencies add up. They reduce the need for intermediaries, simplify post-trade processes, and eliminate much of the operational overhead tied to reconciliation.
When finance stops sleeping
If tokenised cash really takes hold, it could start to quietly change how markets function day to day.
Today, financial systems are structured around time, trading hours, settlement windows, and batch processing cycles. Even in an increasingly digital world, these constraints remain. But programmable, tokenised money introduces the possibility of continuous operation.
“Do you see programmable money enabling truly 24/7 financial markets?” is no longer a hypothetical question; it’s becoming a design consideration.
Thapa believes the implications could be significant.
“When settlement becomes instant, and systems operate continuously, the delay between decision and execution effectively disappears. That should improve liquidity, since capital is no longer sitting idle waiting for settlement,” he added.
At the same time, continuous markets introduce new dynamics.
Faster reactions can improve efficiency, but they can also amplify volatility. Without natural pauses in the system, markets may become more sensitive to real-time information.
“There’s also a structural shift for institutions. Many existing processes are built around defined operating hours. Moving to a 24/7 model requires a different approach to liquidity management, risk monitoring, and even staffing,” Thapa said.
Programmability: The real shift
While tokenisation improves infrastructure, programmability changes behaviour. Money, in this setup, isn’t just sitting idle anymore; it can actually “do” things, carrying instructions and acting on them when certain conditions are met.
So a payment might go through the moment a contract is fulfilled, collateral can shift on its own, and liquidity can move depending on what’s happening in the market.
“Yes, and I think this is where things start to get really interesting. Transactions are no longer just instructions; they can carry conditions and logic,” Thapa noted.
When combined with data and artificial intelligence, the implications expand further. Over time, these systems may move beyond fixed rules and start adjusting on their own, reacting to changes as they happen.
“Over time, I expect this to evolve into more autonomous systems where both execution and decision-making become increasingly automated,” he emphasised.
This is where the idea of ‘programmable money’ begins to feel less like infrastructure and more like an operating layer for financial activity.
Risks in a code-driven system
With that shift comes a different kind of risk. Traditional financial systems are built to manage delays, human errors, and operational inefficiencies. Programmable systems introduce new vulnerabilities, ones tied to code, data, and automation.
“The nature of risk changes quite a bit. Instead of dealing mainly with delays or manual errors, the focus shifts to system design, code quality, and data reliability,” Thapa said.
Smart contracts, once deployed, execute automatically and often irreversibly. A flaw in logic can scale quickly, with consequences that are difficult to unwind.
Then there is the question of how reliable the data actually is. These systems depend on outside inputs to make decisions, and if that data is wrong or tampered with, the results can go off track just as quickly.
Add AI into the mix, and things get more complicated. Questions around model behaviour, transparency, and whether decisions still reflect what’s happening in the real world start to matter a lot more. The emphasis, as Thapa puts it, shifts toward proactive risk management, testing, validation, and continuous monitoring.
Bridging old and new
Despite the momentum, tokenised finance is unlikely to replace existing systems overnight. In fact, the near-term reality is more hybrid than transformative.
“Tokenised financial infrastructure is no longer theoretical. However, parallel financial infrastructure will co-exist for years to come,” Landriault said.
Legacy systems are deeply embedded, and institutions cannot simply abandon them. Instead, the focus is on integration, connecting new technologies with existing frameworks.
“Scalable, institutional-grade capabilities will be the result of incremental adaptation over the years ahead, rather than overnight transformation,” she added.
This gradual approach reflects both technical and regulatory realities.
One of the bigger hurdles is still getting different systems to talk to each other smoothly. Rules and regulations are also catching up, trying to make sense of new forms of money. And for institutions, there’s the added task of investing in the kind of infrastructure that can actually connect all of this.
As Thapa puts it, the system is “progressing, but not fully there yet.”
A layer, not a replacement
One of the more persistent misconceptions around tokenised money is that it represents a break from traditional finance. In practice, it looks more like an evolution.
“I tend to see it more as an evolution of financial infrastructure rather than a completely new concept. Most institutional work in this space is focused on improving existing systems using tokenisation, not replacing them,” Thapa added.
That distinction is important.
Tokenised cash is not coming up on its own; it is growing alongside things like CBDCs, stablecoins, and the systems already in place today, each serving its own purpose. Over time, these pieces could start fitting together, shaping a more connected and flexible financial system.