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As blockchain evolves and nonbank private credit expands, money creation through traditional bank lending is losing ground. This shift challenges the fractional reserve banking system, highlighting the need to rethink money creation as private credit tokenization becomes more prevalent in our economy.

Why Rethink Money Creation?

The tokenized asset market is projected to reach $4 to $16 trillion by 2030, according to reports by Boston Consulting Group and McKinsey & Company. Tokenization enhances liquidity, fractional ownership, and investor participation while accelerating the decline in bank lending, driven by securitization and private credit growth since 2008. Individuals control over half the world’s $290 trillion in wealth, with only 5% in alternative investments. Blockchain-driven tokenization could boost this to 20%, expanding the market by trillions.