Fink and tokenization: the unexpected lifeline for cash

BlackRock's tokenization: the move that makes cash valuable again

Larry Fink has achieved what no campaign for hard cash ever managed: making money in physical form look like a reasonable safe haven again. His push to tokenize assets – companies, properties, even housing – has put international banking on alert, which sees in the BlackRock chief executive's initiative an attempt to create private currency without limits.

The central thesis of the most alarmist camp points out that tokens move like money but are merely an electronic entry backed by the assets pledged. The digital dollar at least has US public debt behind it, however little that may be worth. Fink's token would have behind it everything the user gives up, which would cease to be theirs. And whoever controls the exchange system, the traditional banks, will not tolerate it escaping their monopoly on money creation. If it persists, they will liquidate it, the argument goes.

Another, more pragmatic reading holds that BlackRock is on the same side as the banks. If it makes a move, it is because it can, and probably because it has been asked to. They will not let their invention fail. On the horizon, water appears as the next asset to be targeted, and some are already talking about smelling blood before diving in.

The final irony is that Fink's attempt may end up saving paper money: if the banks manage to stop it, cash will remain the only means of payment that does not depend on a private issuer. It is a prediction with many caveats. But in the game of financial capitalism, the bait usually ends up swallowing the one who casts it.