European Central Bank President Christine Lagarde, speaking at the ECB’s Sintra Forum in Portugal on July 2, 2025, called for stricter regulation of stablecoins to protect central bank oversight of the digital euro. She warned that private digital currencies could erode monetary policy by enabling a “privatization of money,” describing money as a public good and central banks as its protectors.
The Power of Digital Securities
Digital securities are tokenized representations of real-world assets—stocks, bonds, real estate, or even intellectual property—recorded on blockchain ledgers. Unlike stablecoins, which are pegged to fiat and backed by government debt, or commercial bank deposits, tokenized assets derive value from tangible or productive underlying assets. Enabled by blockchain’s transparency and efficiency, they facilitate instant, low-cost, and global transactions without intermediaries like banks or clearinghouses.
Tokenized debt and equity serve as money in its truest sense. As a unit of account, they provide stable valuation tied to real assets, not fiat subject to devaluation. As a medium of exchange, they enable seamless peer-to-peer transfers across borders. As a store of value, they offer resilience against inflation, outperforming commercial bank debt, which is often diluted by fractional reserve lending. This makes digital securities a superior alternative to both fiat and stablecoins, unlocking financial freedom for individuals and businesses alike.
Lagarde’s Misplaced Concerns
“I regard money as a public good, and ourselves as the public servants in charge of securing and protecting that public good. My fear is that blurring of the lines between money, payment methods, and technology infrastructure is likely to lead to a privatization of money”.
She argued that stablecoins could divert funds from banks, undermining monetary policy and threatening sovereignty if private issuers gain influence. Her remarks, though aimed at stablecoins, reflect a broader resistance to any innovation that challenges centralized control, including digital securities.
Other central bankers share her apprehension. Bank of England Governor Andrew Bailey insisted that stablecoins “have to be regulated as money” to protect financial stability, a stance that could extend to tokenized assets. Bank of Korea Governor Rhee Chang-yong cautioned that unbacked cryptocurrencies could evade capital flow controls, a concern applicable to on-chain securities. Yet these fears miss the point: digital securities don’t privatize money; they redefine it, shifting power from institutions to individuals.
The Flaws of Centralized Systems
Centralized currencies and commercial bank debt have long stifled economic freedom. Fiat money, manipulated by central banks, erodes purchasing power through inflation. Commercial bank debt, created through fractional reserve lending, fuels systemic risk and entrenches reliance on intermediaries. Stablecoins, while innovative, remain tethered to this flawed system, as their value often depends on fiat reserves or bank-held collateral.
Digital securities break this cycle. By tokenizing the capital stack, they align money with real-world value—property, corporate equity, or infrastructure projects. Blockchain’s immutable ledger ensures transparency, eliminating the opacity of traditional finance. Smart contracts automate settlement, reducing costs and delays. This decentralized model empowers the unbanked, streamlines global investment, and protects against currency devaluation, addressing failures that central banks and commercial banks have perpetuated.
Regulatory Resistance
Regulators are scrambling to respond, but their focus remains on control, not innovation. The European Union is pushing a digital euro to counter private digital currencies, with Lagarde urging swift legislation:
“Central banks must innovate to meet the demands of a digital economy while ensuring money remains a public good”.
– Christine Lagarde
These efforts aim to preserve centralized authority, not to empower individuals. A digital euro or regulated tokenized assets under state control would replicate the surveillance and restrictions of fiat systems, undermining the promise of decentralization. The real opportunity lies in fostering open, blockchain-based markets where assets, not fiat, define value.
Addressing Challenges
Digital securities face hurdles, including regulatory uncertainty and the need for robust standards to prevent fraud. Tokenization platforms must ensure assets are accurately represented and legally enforceable. Yet the industry is already adapting. Firms like Polymath and Securitize are developing frameworks for compliant token issuance, while blockchain’s transparency ensures accountability. These solutions outpace the sluggish reforms of traditional finance, proving that innovation, not regulation, will resolve these challenges.
Central bankers warn that unregulated digital assets could destabilize economies, but tokenized assets offer stability by tying value to real-world collateral, unlike unsecured commercial bank credit . The risk of instability lies not in tokenization, but in clinging to a centralized system that has repeatedly failed.
Lagarde’s push for centralized control reads like a bid for power, aiming to perpetuate a century-long enslavement of global economies, and it should be denounced by free individuals seeking financial sovereignty.
A New Financial Paradigm
Lagarde’s “privatization” warning frames digital innovation as a threat, but digital securities redefine money as a tool of empowerment. Beyond stablecoins, the tokenization of debt and equity place financial control in the hands of individuals, not bureaucrats. They enable direct investment in global markets, provide refuge from inflationary policies, and foster inclusion for those excluded by traditional finance.
Tokenization of the capital stack transcends technology, reshaping money’s role in the global economy. As digital securities gain momentum, they challenge the debt-driven financial model, fostering transparency and efficiency. Central banks may push back, but decentralized systems are the future. By aligning value with real assets, digital securities pave the way for innovation, free from the debt issued by slaveholders and bureaucrats.
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