Tokenised finance is moving from pilots to production, and the question central banks and financial institutions are now asking is not whether digital money will emerge but how different forms of it will settle against one another safely. Wholesale central bank digital currencies, central bank money in tokenised form for use between institutions, are one candidate for that settlement layer.

Giesecke+Devrient, the Munich-based security technology group founded in 1852, has supplied central banks with banknote and currency technology for most of its history and now builds CBDC infrastructure for both retail and wholesale use. Dr Wolfram Seidemann has been chief executive of Giesecke+Devrient Currency Technology since 2016 and with the group since 1999. He answered The Fintech Times‘ written questions on where wholesale CBDCs fit, what the live experiments have shown and how public and private
money will coexist.

Seidemann’s starting point is that tokenisation has changed phase. “Tokenised finance is advancing rapidly. The question is no longer whether digital currencies will emerge, but which forms of digital money will provide the foundation for trust and settlement at scale,” he says. Wholesale CBDCs are likely to play a central role, in his view, because they represent central bank money in digital form for interbank and tokenised asset settlement. They can enable instant transactions, reduce counterparty risk, simplify cross-border payments through payment-versus-payment mechanisms and improve liquidity management for financial institutions.

“What has changed is that tokenisation is moving from experimentation to implementation,” he says. “Financial institutions are no longer asking whether tokenised assets will become mainstream, but how settlement infrastructure must evolve to support them safely and efficiently.” The goal, he adds, is not digitisation for its own sake but faster, safer and more efficient financial markets that can support new forms of commerce, investment and cross-border activity.

Momentum is building as stablecoins, tokenised deposits and other digital payment technologies advance, and Seidemann sees that as raising questions about monetary sovereignty, regulatory oversight and the singleness of money as much as it creates opportunities. “Central banks therefore need to ensure that public money remains a trusted anchor in an increasingly digital financial ecosystem,” he says. “The future is not about replacing one form of money with another, but about building a hybrid monetary system in which public and private forms of money interact seamlessly and securely.”

A common settlement layer

The practical case rests on fragmentation. “Without a common settlement layer, we risk creating fragmented digital money ecosystems that do not interact efficiently with one another,” Seidemann says. Wholesale CBDCs can provide a trusted foundation on which different forms of tokenised money settle across institutions and markets, and he points to the Bank of Korea pilot and Project Agorá as evidence of growing interest in the model. Project Agorá, led by the Bank for International Settlements with seven central banks and more than 40 private-sector financial firms, is testing tokenised commercial bank deposits alongside tokenised wholesale central bank money on a single programmable platform.

Compared with today’s settlement infrastructure, he says, wholesale CBDCs can enable atomic settlement, programmable logic and more efficient cross-border execution. “In this sense, they are not simply another payment instrument, but a strategic foundation for a more efficient, interoperable and trusted tokenised financial system,” he says. “They can help markets innovate without fragmenting trust, liquidity or settlement finality.”

Interoperability is a governance problem

Interoperability between CBDCs, stablecoins and tokenised deposits is often described as the hard problem. Seidemann’s answer is that it has to be designed in from the outset. “CBDCs should not operate as stand-alone systems, but as part of a broader ecosystem that includes commercial bank money, tokenised deposits and regulated private digital money,” he says. That requires common standards, strong governance and close collaboration between central banks, regulators, financial institutions and technology providers. Security matters as much: “Interoperability creates value, but if it is not properly secured, it can also become a vulnerability.”

He is clear about where control should sit. “If digital public money is issued, its issuance and operation should not depend on private infrastructures or governance arrangements,” he says. “Central banks should define and govern the monetary layer, while private-sector participants innovate through services, applications and user experiences built on top of it.”

“Ultimately, interoperability is not just a technical challenge. It is a governance challenge and a trust challenge,” Seidemann says. Once that foundation is in place, he expects individuals and businesses to move value across different forms of money “with the same confidence and ease that they exchange information today”.

What the pilots have shown

On the live experiments, Seidemann points to Helvetia, Jura and mBridge, which he says have shown the potential for faster settlement, reduced settlement risk, improved liquidity management and more efficient cross-border transactions using central bank money in a tokenised environment. They have also demonstrated delivery-versus-payment and payment-versus-payment settlement, and the integration of tokenised assets with wholesale central bank money.

“Perhaps the most important lesson is that the technology is increasingly proving itself,” he says. “The real challenge now is creating governance, interoperability and operating models that can scale across markets and jurisdictions.” The next phase, he argues, will be less about proving that wholesale CBDCs work technically and more about demonstrating how they create value in real financial ecosystems. “In other words, the question is shifting from technical feasibility to institutional readiness and ecosystem design.”

G+D’s role

G+D’s position in this landscape follows from its history. “G+D has long supported central banks in protecting the integrity of public money,” Seidemann says. “As this infrastructure becomes digital and increasingly tokenised, we help extend that role into the next generation of payment and settlement ecosystems.” The company’s CBDC infrastructure supports both retail and wholesale use cases on a common foundation, and he lists scalability, cybersecurity, offline payments and cross-border connectivity as the challenges it is built to address.

Looking five years ahead, Seidemann expects a layered, tokenised monetary architecture rather than a contest between public and private money. “The future of digital money is not competition between public and private money. It is interoperability between them,” he says. Central bank money remains the trusted foundation, commercial bank money and regulated private forms of digital money drive innovation, competition and new services, and the two-tier system evolves rather than being replaced. Technology providers and fintechs, in his account, innovate on top of a harmonised and trusted infrastructure.

“The future will not be defined by one dominant form of money,” he says. Success, in his view, will come from a hybrid ecosystem in which public and private forms of money interact seamlessly, securely and efficiently.

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