Tokens/coins can send value and store text plus operate based on smart contracts. Which would take care of the storing of data within the coin or contract.

If a wallet or token was lost or stolen. The owner would have some way through an exchange to reissue a token by proof of traditional ownership documents. Obviously, Bitcoin would be the best but without the ability to create and burn tokens, this would not work. I'm not a proponent of that, but in this case, it would make sense and would allow the rightful owner to maintain possession in the event of an adverse situation. On a sale, the old coin would be burned and all holders paid off based on the value of the selling transaction. That would be paid in fiat, USDC or whatever the holder desired it be converted to (programmatically).

A token would not replace sovereigns, just make them liquid and more easily usable / transferrable if desired. The intent you bring up, it does not seem like it would make sense to bring them "online" as people would know about them and it sounds like your point is for people not to know.

The nation-state wallet question would most likely work like custodial and non-custodial with the various tradeoffs.

The border point is to merge the offline with the online to allow more seamless liquidity to the assets we have. Making those that are more sticky and less liquid become more usable, or at least giving choice to those that would like to move portions or all of it and have it connected to other things as tech continues to migrate us in that direction.

I'm selling a piece of real estate in the UK at the moment. It's not fungible for various reasons, but put that to one side.

First thing – having a token for the property is OK, it proves I'm the owner, but the buyer will still have to ask a lot of questions before they part with whatever they are using as money (has it flooded since I bought it? have there been any issues with the neighbours? and so on). And they need to be sure that I am the rightful owner of the ownership token. How would a wallet store those questions and answers and identity?

What happens if my phone is stolen? Is the token for my property recoverable? If so, from where? In the UK that would be the Land Registry (which, by the way, is for practical purposes essentially non-digital, fecked up, slow and crappy… but let's assume it is better in the future). The Land Registry provides a state guarantee of title so it's indispensible. We haven't really got rid of the trusted third party, have we?

I also have a few gold sovereigns, my preferred form of gold ownership because there is no Capital Gains Tax if I sell them for a profit which can be measured in fiat. These things aren't individually identifable in any way which would tie them to a token. That's actually one of their virtues – there's no serial number, no record of them changing hands. If I exchange them for something, be it fiat or goods or even Bitcoin, they have to change hands physically – in fact that's the whole point because although I maintain an account at Bullionvault.com I don't really like paper gold, I prefer the real thing even though it carries costs of storage and insurance. Nobody knows how many sovereigns I own (and just as an aside, I'm the guy who first suggested the boating accident meme on Zero Hedge). Bullionvault will tell you that all their gold is allocated, and I do actually own identifiable grams of gold (ie: grams forming part of a serialy numbered LBMA bar, which is audited) but unless I can afford to withdraw a whole bar I'm never going to to see or touch, and certainly not hand over to someone else, the gold I am said to be owning. How do tokens on a phone replace my sovereigns?

Another question (remember, I'm not hostile, just thinking this through). Suppose my government identities end up in a digital wallet – my national Insurance account, my tax account, my state pension, my passport, driving licence, pilot's licence… and so on. All in a digital wallet which I access and to some extent control through my phone. Is there now a temptation for the state to say, "We don't like you having all that stuff on your own device. Here's a device provided by us, which we control, and you must keep those tokens on this." Or even on a chip, implanted in my body. I'll fight to the death to prevent that hapening.

Final question – are people going to trust an electronic wallet completely? I still print out bank statements for accounts holding substantial sums because I don't trust my bank to run its IT system 100% perfectly for ever. Do some people still hold Bitcoin offline in print (QR codes or whtever)?

Now, ignoring the problems for a moment, let's assume we have a digital wallet which can store tokens for just about anything, and it's either on phones, or hard drives, or on remote servers ("in the cloud" – which I'm guessing is its natural home). There's no need for new hardware to be invented to make that happen. And there's no need for any fundamentally new software. And possibly existing cryptography can protect it. What we actually need is a protocol which allows automatic conversion of any token to a standard format on a standardised blockchain which every device in the system can understand, exchange, and store. Is that here yet?