Why AI and tokenised money could make bank runs faster (opens the source in a new tab)
- Tokenisation, putting assets such as bonds or deposits on programmable digital ledgers, is still small: economist Darrell Duffie counts about $15bn of treasuries. But banks, BlackRock and regulators in the UK and US are pushing it to move money and collateral faster and cheaper.
- Gillian Tett, citing former GCHQ chief David Omand, sees two risks: AI bots shifting tokenised deposits instantly could cause faster bank runs, and AI makes hacking ledgers easier.
- Her answer is stronger cyber defences and central bank safety nets, though geopolitics is weakening cross-border cooperation.
- $15bn
- treasuries tokenised (Duffie)
Why it matters Faster money cuts costs in good times but leaves less time to react in bad ones. A run like Silicon Valley Bank's could move even faster when bots, not people, decide where deposits go.
Other side Tokenised assets are still tiny, and faster settlement could also let central banks act faster in a crisis. Many of these risks apply to digital finance in general, not to tokens alone.