BNM Sets Phased Approach For Banking Tokenisation

Christina Chandra

15th May 2026 - 3 min read

Bank Negara Malaysia (BNM) has signalled support for tokenisation in banking, but is making clear that speed is not the priority. Speaking at The Asian Banker Summit 2026 on 13 May 2026, BNM assistant governor Dr Norhana Endut said the central bank wants implementation to be “phased and measured”, with interoperability, governance, and risk controls in place from the start rather than retrofitted later.

The remarks come as financial institutions across the region explore whether tokenisation can reduce the friction that still slows down payments, cross-border transfers, and liquidity management.

What Tokenisation Could Change For Banking

Tokenisation converts financial assets or money into programmable digital tokens that can be transferred on shared digital infrastructure. The use cases BNM is exploring through its Digital Asset Innovation Hub include programmable money, tokenised deposits, atomic settlement, and improved liquidity and collateral management.

If these develop as intended, the practical effects could include faster settlements, lower transaction costs, and more transparent movement of funds when you send or receive money. Conditions such as eligibility, timing, or transaction limits could be embedded directly into the funds, reducing manual compliance checks further down the process. BNM is still in the framework-building stage, not deployment.

Why Take A Phased Approach To Tokenisation?

Dr Norhana drew a distinction between moving slowly and moving in sequence. “Not slow, but phased,” she said. The concern is that rushing tokenisation without addressing interoperability first could create fragmented systems that cannot communicate with each other or with existing infrastructure, trapping liquidity rather than freeing it.

BNM is also placing equal emphasis on governance alongside the technical build. Clarity on roles, accountability, and resilience expectations matters as much as the technology itself, she said.

Fraud As A Known Risk

One of the more direct points Dr Norhana raised is that greater digitalisation increases exposure to financial crime. “As we digitalise, we are actually expanding the attack surface for bad actors,” she said, adding that fraud and scams could spread more widely and quickly as financial systems become more connected.

This explains why BNM treats certain friction points as necessary rather than problems to eliminate. The central bank’s position is that compliance rules can eventually be embedded into programmable systems, making transactions both faster and more secure. But that outcome depends on the regulatory framework being designed before the infrastructure is deployed.

Industry Sees The Timing As Right

On the same panel, CIMB Group regional head of group wholesale banking Sylvia Wong said the industry is ready for wider tokenisation, particularly in Asean markets. She pointed to friction in payment settlement workflows, cross-border flows, and liquidity management as the areas with the most to gain. “The time is now,” she said, noting more than a decade of experimentation and high digital adoption across the region’s population.

BNM and industry are largely moving in the same direction. The difference is one of sequencing rather than intent.

When The Changes Might Mean Something To You

Tokenisation is not arriving overnight. The changes are more likely to appear gradually, in the form of faster settlement times, fewer delays on international transfers, or more responsive systems working in the background.

How the regulatory framework now being developed handles the balance between efficiency and security will shape what banking looks like for you once tokenisation moves from pilot to practice.

Christina Chandra

Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.

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