Governance first, technology second Nilmini Rubin (@nilminirubin), Chief Policy Officer at @hedera, used a Finextra piece published Tuesday to make a pointed case: tokenization's most cited b
Nilmini Rubin (@nilminirubin), Chief Policy Officer at @hedera, used a Finextra piece published Tuesday to make a pointed case: tokenization's most cited benefits, including transparency, programmable compliance, and auditability, are only realisable if governance frameworks are designed into a system from the outset rather than retrofitted later.
The financial industry has largely framed tokenization as a technology problem. Rubin's position is that the harder work is institutional. Cross-border payments today rely on multiple intermediaries, varying compliance approaches, and distinct settlement frameworks across jurisdictions, creating friction that raises costs and slows settlement across trade, remittances, aid distribution, and interbank payments. Tokenization offers a pathway toward more seamless settlement, but, she argues, efficiency gains will only be realised if governance keeps pace with the technology.
Rubin cites standards work from CPMI-IOSCO and the Financial Stability Board alongside jurisdiction-level rules such as Wyoming's stablecoin law to illustrate how tokenization can embed transparency and operational safeguards in ways that align with broader G20 priorities. Without alignment on legal frameworks and supervisory expectations, she warns, tokenized systems risk replicating the same fragmentation that already burdens fiat payments. The BIS Innovation Hub's work underscores why this matters at scale: Project Nexus, which aims to connect multiple domestic instant payment systems globally, and Project mBridge, a multi-CBDC platform for wholesale cross-border payments, both place governance and legal design at the centre of their architecture alongside the technology itself.
Rubin extends the governance argument beyond interoperability into two further areas. On transparency and resilience, she points to shared ledgers, tamper-evident records, and cryptographic verification as tools that enable real-time assurance across institutions. Hedera's Guardian framework demonstrates this in carbon markets through immutable audit trails. But she is clear that embedded accountability does not emerge from technology alone: it must be mandated through oversight requirements that define how tokenized infrastructure identifies, reports, and addresses systemic risk.
On financial inclusion, Rubin argues that fractional ownership can expand retail access to instruments such as government securities and create new financing pathways for small businesses and emerging markets. Early pilots in Kenya and the Philippines show how digital infrastructure can lower participation barriers. Access alone, however, is not inclusion. For participation to scale responsibly, tokenized systems must be built on trusted infrastructure: reliable identity verification, meaningful consumer protections, and effective grievance mechanisms. Poorly governed markets will erode the trust that broad adoption requires.
The piece adds to a growing body of policy thinking that treats regulation not as a constraint on innovation but as a precondition for it. Rubin brings considerable credentials to that argument, having spent 12 years as a senior aide on the Senate Foreign Relations Committee and the House Foreign Affairs Committee before moving into blockchain and AI policy.
Sources:Nilmini Rubin, "Governance is tokenization's enabler", FinextraProject Nexus blueprint, BIS Innovation Hub, July 2024Nilmini Rubin, World Economic Forum Agenda Contributor profile
