Tokenized Value Settlement

Notes

Tokenized value settlement is not a single architecture. The unit of value may be a payment stablecoin redeemable at par against a reserve of high-quality liquid assets, as defined under the GENIUS Act;¹ a tokenized deposit representing a claim against an insured depository institution; a wholesale central bank money token used for interbank settlement;² or a tokenized security representing an interest in an underlying instrument.³ Each architecture distributes the obligations of issuance, custody, conveyance, and redemption differently, and each composes a different settlement system around the token.

What is common across architectures is that the token is not the value. The token is a representation of a claim against an issuer, supported by reserves under the control of a custodian, conveyed across a platform operated by participants who are themselves subject to (or absent from) supervisory frameworks. Whether a transfer of the token constitutes settlement of the underlying claim depends on the integrity of every link in that chain. Tokenized value settlement is therefore not the act of moving a token; it is the condition produced when the act of moving a token produces final settlement of the value the token represents.