Risks, Challenges, and Ethical Considerations in Tokenized Economic Systems

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Author(s): Virender Singh Thakur (Chandigarh University, India)and Akanksha Kaushik (Chandigarh University, India)
Copyright: 2026
Pages: 24
Source title: The Impact of Blockchain in Token Economies
Source Author(s)/Editor(s): Guneet Kaur (University of Stirling, UK), Lorena Nessi (Fairleigh Dickinson University, UK)and Pooja Lekhi (University Canada West, Canada)
DOI: 10.4018/979-8-3373-3371-7.ch011

Keywords: Business Science Reference / Data Management / Economics and Economic Theory / Knowledge Management and Library Science

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Abstract

Tokenized economic systems, powered by blockchain and distributed ledger technologies, are reshaping ownership, finance, and governance through digital tokens representing assets, rights, or value. While offering transparency, efficiency, and new economic models, these systems introduce significant risks—technical vulnerabilities, market volatility, regulatory gaps, and governance flaws. Ethical concerns such as exclusion, manipulation, environmental harm, and lack of accountability are also prevalent. Through analysis of token types, systemic risks, and real-world failures (e.g., TerraUSD, The DAO, OpenSea), this chapter highlights both the promise and pitfalls of token economies. It proposes principles for responsible tokenization—including transparency, equity, sustainability, and hybrid governance—supported by interdisciplinary collaboration. The chapter aims to guide developers, regulators, and researchers in building resilient, ethical, and inclusive digital economies.

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Risks, Challenges, and Ethical Considerations in Tokenized Economic Systems

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