News

Digital "tokenized" assets under development at seven federally insured banks and already in use at the world's largest investment platform may pose new fraud- and cyber-related risks to financial institutions that adopt them, according to technical and legal analysts. The technology, which functions similarly to cryptocurrency and non-fungible tokens but is distinct from both, involves encoding real-world assets such as securities, deposits or physical possessions as digital tokens governed by "smart contracts," and storing them on a blockchain or other distributed ledger shared between two or more banks. Tokenization promises to reduce the time banks require to clear and settle...