In March 2026, the head of the world’s largest asset manager compared this moment to the Internet of 1996, and the thing he was describing was the tokenization of money and of nearly everything money can buy. If the tokenization of money unfolds as its architects intend, the deed to your house, the shares in your pension, and the balance in your savings account could all become tokens on a digital ledger, traded around the clock and settled in seconds. It sounds like a technical upgrade. It is also the oldest question in finance, asked again in a new language: who creates money, who keeps the ledger, and who decides what the numbers on it are worth?
To understand where that question is heading, it helps to look at where it has always led — to the small circle of people who stood closest to the source of money, and to the architecture that kept them there.
The families who financed emperors
In 1420, the Medici Bank of Florence became Depositary of the Apostolic Chamber, the banker responsible for managing the papacy’s finances. The family held that office for 22 years. A private family business had become the treasury of the most powerful transnational institution in Europe, and the Medici used the deposits, access, and relationships it brought to rise from merchants to rulers of Florence and, eventually, to the papal throne itself.
A century later, the pattern became explicit. In 1519, seven prince-electors were to choose the next Holy Roman Emperor, and their votes had a price. Historians estimate the campaign cost Charles of Habsburg, already king of Spain, around 850,000 florins, and roughly 543,000 of them — close to two-thirds — came from one man: Jakob Fugger of Augsburg. Four years later, pressing for repayment, Fugger wrote to the emperor and reminded him plainly that he would not have won the crown without Fugger’s money. It is hard to find a cleaner illustration of who held power over whom.
The pattern did not stop at kings. When the United States bought the Louisiana Territory from France in 1803, doubling the size of the young nation, it paid with $11.25 million in bonds that two private banks, Barings of London and Hope & Co. of Amsterdam, turned into cash for Napoleon — even as Britain and France went back to war. In 1875, when British Prime Minister Benjamin Disraeli saw a chance to buy Egypt’s stake in the Suez Canal, he did not wait for Parliament. N M Rothschild & Sons advanced the government £4 million within days, and Britain acquired 176,602 shares, about 44% of the company, securing the route to India. Fifteen years later, when Barings itself nearly collapsed under bad Argentine debt, the Bank of England organized a rescue fund that grew to £17.1 million, contributed by the City’s major institutions. The idea of a bank too big to fail was already alive in 1890.
None of this requires a secret plot. It is an architecture. Whoever lends to the sovereign gains a seat beside the sovereign, and the larger the debt, the closer that seat moves to the room’s center. The names changed from Florence to Augsburg to London. The architecture did not.
When one banker stood in for a nation
By the late 19th century, the architecture had crossed the Atlantic, and it found its fullest expression in one man. In February 1895, gold was draining out of the US Treasury so fast that the government risked being unable to honor its own currency. President Grover Cleveland turned to a syndicate led by J.P. Morgan and August Belmont Jr., who acted for the Rothschilds. It delivered about 3.5 million ounces of gold in exchange for roughly $62 million in government bonds. The United States defended its money by borrowing from private bankers.
Twelve years later, the panic of 1907 hit the banks themselves, and the country had no central bank to call. So Morgan, then 70, gathered New York’s leading bankers in his library and, as the institution that now holds it tells the story, locked the doors until they agreed to put up the funds to stop the run. His biographer Ron Chernow described him as acting “like a one-man Federal Reserve system.”
Three years later, the country began building a real one, and the Federal Reserve itself recorded its origin story. In November 1910, Senator Nelson Aldrich traveled in secret to the Jekyll Island Club in Georgia with a small group: Henry Davison, a partner at J.P. Morgan & Co.; Frank Vanderlip, president of National City Bank; Paul Warburg of Kuhn, Loeb & Co.; A. Piatt Andrew of the Treasury; and Aldrich’s secretary. Their draft became the Aldrich Plan, the template for the Federal Reserve Act that President Woodrow Wilson signed in December 1913.
What made that meeting so striking was the public mood. In 1912 and 1913, a House subcommittee led by Arsène Pujo investigated what the press called the “money trust.” Its report found that members of J.P. Morgan & Co. and a handful of allied banks held 341 directorships in 112 corporations with combined resources of about $22.2 billion. The committee defined the money trust as “an established identity and community of interest between a few leaders of finance.” Wilson, campaigning in 1912, said it more bluntly.
A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. — Woodrow Wilson, The New Freedom (1913)
The Federal Reserve was sold, in part, as the cure for that concentration, and Congress reshaped the bankers’ plan by adding a publicly appointed board in Washington. Yet the twelve regional Reserve Banks are still legally owned by their member banks, which must buy non-tradable stock in them and elect six of each bank’s nine directors. The cure was designed with the patient in the room.
The thread runs into the present. J.P. Morgan & Co. is a direct ancestor of JPMorgan Chase, today the largest bank in the United States and in the highest occupied tier of the Financial Stability Board’s list of 29 globally systemically important banks. But the more important continuity is not a family name. It is the position. More than a century after Morgan, a few institutions still hold the power to decide who receives credit, and very few people outside them understand how money is actually created.
Where money actually comes from
Most people carry a simple picture of banking: savers deposit money, and the bank lends it out. In 2014, the Bank of England published a paper explaining that this picture runs the other way around. In the modern economy, it wrote, “whenever a bank makes a loan, it simultaneously creates a matching deposit” in the borrower’s account. The money did not exist before the loan. Lending creates it as a number entered on both sides of a ledger.
This is not a fringe reading. The Deutsche Bundesbank described the same process in 2017. In 2014, economist Richard Werner tested this by taking out a real loan from a German bank, examining its books, and concluding that individual banks create money out of nothing. In the United Kingdom, the Bank of England says 97% of the money held by the public exists as bank deposits rather than notes and coins. In the United States, the old rule that banks must hold a fixed fraction of deposits in reserve no longer exists: the Federal Reserve cut reserve requirements to zero on March 26, 2020.
What, then, does the central bank do? It does not hand over a fresh $1,000 every time a commercial bank makes a $1,000 loan. It sets the price of money through its policy interest rate, supplies the reserves banks use to settle with one another, and stands behind the system as lender of last resort. What limits a commercial bank’s money creation is profitability, capital rules, and whether people want to borrow — not a pool of savings sitting in a vault. And when a loan is repaid, the money it created disappears again. Now follow the $1,000. A bank creates it as a 10% loan, and the borrower owes $1,100. The bank created the principal. Where does the extra $100 come from?
Economists’ standard answer is that interest does not leave the economy. The bank spends its income on salaries, rent, and dividends, and the same money circulates many times over. In principle, a single loan can be repaid in full, and even reform campaigners such as the British group Positive Money accept that the arithmetic works. But zoom out from one loan to the whole system, and a harder truth appears. Because almost all money is someone’s debt, paying debt down destroys money. When everyone tries to repay at once, the money supply shrinks, incomes and prices fall, and the remaining debts grow heavier — the spiral the American economist Irving Fisher called debt deflation after the crash of 1929. To grow, or merely to avoid that spiral, new borrowing must keep outpacing repayment.
So the uncomfortable point is not that the debt can never be repaid. The system was never designed to allow it. The chemist Frederick Soddy saw this in 1926, warning that debt grows by compound interest while real wealth cannot grow forever. The economist Michael Hudson reduced it to a rule: debts that can’t be paid won’t be paid.
Banking establishments are more dangerous than standing armies. — Thomas Jefferson, letter to John Taylor (1816)
A system that cannot stop borrowing
The numbers suggest the rule is holding. According to the Institute of International Finance, global debt reached a record $365.5 trillion in the first half of 2026, up more than $10 trillion in six months. That is roughly 310% of everything the world produces in a year. The IIF noted that a recent dip in debt relative to output came from inflation swelling nominal economies, not from anyone genuinely paying down what they owe. The debt did not shrink. The money it was measured in simply became worth less.
The United States shows where this leads. In fiscal year 2026, which ended in September, Washington paid a record $1.05 trillion in net interest on its debt — more than it spent on defense. The Congressional Budget Office projects that federal debt held by the public will rise from about 101% of GDP this year to 120% by 2036, beyond the record set after World War II. Interest is now one of the largest bills the most powerful government on Earth has to pay, and it covers that bill, in effect, by borrowing more.
There have been serious attempts to change the design. In 1933, a group of University of Chicago economists proposed requiring banks to hold 100% reserves against deposits, ending private money creation, and Irving Fisher became the plan’s best-known champion. In a 2012 working paper, two economists at the International Monetary Fund modeled this “Chicago Plan” and found support for its central claims, including dramatic reductions in public and private debt. In 2018, Switzerland put a similar “sovereign money” initiative to a national vote. Voters rejected it by 75.7%. The design has defenders and critics. Most people have simply never been asked to think about it.
Older civilizations understood something the modern system tends to forget. In ancient Mesopotamia, Babylonian kings, including Hammurabi, periodically proclaimed “clean slates” that canceled personal debts and freed people who had fallen into debt bondage, as the historian Michael Hudson and the anthropologist David Graeber have documented. The Book of Leviticus describes a Jubilee year in which land returned to its families, and those bound by debt went free. These societies did not believe obligations could compound forever without consequence. An obligation that grows without ever being resolved does not vanish. It accumulates until it demands settlement, and they built that settlement into the moral order. Our system also resets, but through inflation, bailouts, and defaults, and the cost rarely falls on those who keep the ledger.
Cracks in the old order
If the system is straining, the clearest signal came in 2022. After Russia invaded Ukraine, Western governments froze roughly $300 billion of the Russian central bank’s reserves and cut major Russian banks off from the SWIFT messaging network. Whatever one thinks of the reasons, central banks everywhere absorbed the lesson: reserves held in another country’s currency are held with that country’s permission.
What followed was a rush toward an asset that can sit in a nation’s own vaults. Central banks bought more than 1,000 tonnes of gold in each of 2022, 2023, and 2024, and 863 tonnes in 2025, against an average of about 473 tonnes a year between 2010 and 2021, according to the World Gold Council. In a council survey published in June 2026, 89% of the 76 participating central banks expected global central bank gold holdings to rise over the next year, and 74% expected the dollar’s share of world reserves to fall over the next five years. According to IMF data, that share already stands at 56.7%, down from about 71% around the year 2000.
The BRICS group, now ten full members including Brazil, Russia, India, China, South Africa, and Iran, has spent years discussing alternatives. At its September 2026 summit in New Delhi, leaders again backed trade in local currencies and further study of linking their payment systems, but BRICS Pay is still not fully operational, and India has resisted any unified system built against the dollar. China’s CIPS and Russia’s SPFS exist but remain small next to the dollar network. Project mBridge, a platform for cross-border payments in central bank digital currencies built with China, Hong Kong, Thailand, and the United Arab Emirates, lost the Bank for International Settlements as a participant in 2024, and Saudi Arabia quietly left it in 2025.
So has the system hit a wall? The evidence points to strain, not collapse. No alternative has replaced the dollar, and the alternatives that exist often route their users through someone else’s infrastructure, most often China’s. The real question may not be whether one hierarchy is ending, but whether the world is simply choosing between hierarchies. And while that contest plays out between nations, the next version of the answer is being built somewhere else: on the ledger.
What the tokenization of money really tokenizes
Tokenization means representing an asset — a bond, a fund share, a building, a dollar — as a digital token on a blockchain-style ledger, where it can be transferred, split, and settled almost instantly. In his 2026 letter to shareholders, BlackRock’s Larry Fink described it as a way to modernize the financial system’s plumbing, making investments easier to issue, trade, and access. BlackRock manages about $15.5 trillion. Its tokenized money-market fund, BUIDL, launched on Ethereum in 2024 and holds around $2.2 billion; the firm also manages roughly $65 billion in reserves backing stablecoins, including the reserve fund behind Circle’s USDC.
Look closely at what has been tokenized so far, and a pattern appears. Dollar stablecoins, the most widely used tokens of money, passed $230 billion in early 2026. Under America’s GENIUS Act, signed in July 2025, stablecoins issued for the US market must be backed one-for-one by safe assets such as cash, central bank balances, insured deposits, or Treasury bills maturing within 93 days. By mid-2025, Tether alone reported around $127 billion of exposure to US Treasuries, making a private digital-currency company one of the larger holders of American government debt. Among tokenized real-world assets, the largest single category is also government debt: about $14.7 billion of the roughly $38.6 billion tracked by the data provider rwa.xyz in late September 2026 sits in tokenized US Treasury funds.
Read that again in light of what came before. The world’s most powerful government pays more than $1 trillion a year in interest, and a new form of digital money has arrived whose governing law requires it to hold that government’s short-term debt. The newest money in the system rests on the oldest form of debt. That may be prudent regulation. It may also be a new and captive buyer for borrowing that keeps needing buyers. Both can be true at once.
Then there is your house. When a property is tokenized, the token holder usually doesn’t directly own the bricks and land. In most structures, a company — a limited liability company or special purpose vehicle — owns the building, and the tokens represent interests in that company, recorded by a platform, held through a custodian, and governed by the law of whatever jurisdiction the vehicle sits in. Tokenization promises to remove middlemen. In practice, it often adds new ones. Forecasts of a tokenized market worth anywhere from $2 trillion to $30 trillion by the 2030s come largely from firms that sell tokenization services, which is worth remembering. Tokenization does not answer who controls money. It moves that question onto a ledger most people will never see.
Who holds the keys to programmable money?
A token is more than a digital IOU. It is code, and code can carry rules. Programmable money can, in principle, have an expiry date, be restricted to certain purchases, be capped at a maximum balance, or be frozen at the push of a button. Some of this is already real. Early digital yuan giveaways in China came with spending deadlines. Stablecoin issuers such as Tether and Circle can, and do, freeze addresses. The proposed digital euro, whose regulation the European Parliament advanced in July 2026, is set to carry a per-person holding limit (the amount is still under negotiation) and pay no interest. Europe’s commercial banks lobbied for strict limits — to protect the deposits on which their own money creation depends.
The most candid description of what this technology makes possible came from the top of the system. In October 2020, Agustín Carstens, then general manager of the Bank for International Settlements, the Basel-based institution often called the central bank of central banks, said at an IMF seminar that with a central bank digital currency, unlike cash, the central bank would have “absolute control over the rules and regulations” that determine its use, along with the technology to enforce them. He was contrasting digital money with anonymous banknotes, not announcing a plan, and the BIS has since emphasized privacy-preserving designs. But he described the capability accurately. That capability is what’s being built now.
Who builds it matters. The BIS, owned by around 60 central banks and protected by a 1987 agreement with Switzerland that grants it immunity from legal process, has published blueprints for a “unified ledger” on which tokenized central bank money, bank deposits, and assets would live side by side. A 2024 BIS paper co-authored by Carstens named the vision the “Finternet.” Its Project Agorá is testing tokenized payments between banks with seven central banks, including the Federal Reserve Bank of New York and the Bank of England, and more than 40 private financial firms. The United States, by contrast, banned work on a US central bank digital currency by executive order in January 2025 and instead backed privately issued stablecoins. Either way, a handful of institutions hold the keys: central banks on one side, the largest private issuers and banks on the other.
Behind the private side stands a concentration that would have impressed the Pujo Committee. BlackRock, Vanguard, and State Street together manage roughly $34 trillion. A 2017 study found that, combined, they were the largest shareholder in 438 of America’s 500 largest companies — almost nine in ten. The money trust of 1913 was a web of interlocking directorships among a few banks. Today’s version is quieter: a few index-fund giants holding stakes in nearly everything, with the largest of them now leading the push to put assets on-chain.
The questions no ledger can answer
None of this proves that a single hand is steering the world. History shows something subtler and, in some ways, harder to confront: an architecture that rewards whoever stands closest to the creation of money, and that tends to reproduce itself in every new technology. The Fuggers had florins. Morgan had gold. Today’s institutions have index funds, Treasury reserves, and permissioned ledgers. The form keeps changing. The position does not. That leaves questions that deserve answers before the tokenization of money is complete, not after.
- If banks create money when they lend, who decides what gets built — homes and factories, or speculation on what already exists?
- If almost all money is someone’s debt, can the system ever stop requiring more of it, or is tokenization a way to turn more of the world into collateral?
- When the newest digital money is legally required to hold government debt, is it a safer form of money, or a new buyer for borrowing that cannot stop?
- Who runs the ledgers, who can freeze a token, and who can rewrite the code — and will any of them ever stand for election?
- When money becomes programmable, does it remain property, or does it become a permission that can be granted, limited, or withdrawn?
- When your house becomes a token, do you own a home, or a claim on a company that owns it?
An old Chinese proverb says a gentleman loves wealth, but acquires it in the proper way. Its insight is that value is not a number. It is something earned through work, honesty, and trust, and a ledger, however advanced, can only record it. It cannot create it. A money system that forgets this, that treats the creation of numbers as the creation of value, eventually asks people to trust the record keepers more than their own work.
Fink may be right that this is 1996 again. If so, it is worth remembering what 1996 promised — an Internet that would put power in everyone’s hands — and how much of that power, within two decades, settled into a few platforms. Tokenization arrives with a similar promise. The ledger is new. The code is new. The question of who keeps the ledger is as old as the first loan.
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