IMF Warns Tokenized Markets Could Amplify Financial Risks as Equities Show Higher Volatility

Tokenization could make trading and settlement more efficient, but legal uncertainty and financial stability risks may slow wider adoption, according to a Thursday analysis from the International Monetary Fund. Tokenized markets are growing quickly yet remain small next to traditional ones, with poor interoperability and a lack of widely accepted settlement assets cited as key obstacles. Tokenized repos dominate activity at $300 billion to $350 billion in daily volume, against roughly $13 trillion in the broader US repo market.

Tokenized Real-World Assets by the Numbers

Tokenized real world assets reached about $65 billion in outstanding value as of July, a tiny slice of the roughly $300 trillion in global capital-market assets. Tokenized credit made up $30.4 billion and money market funds $17.5 billion, while tokenized equities stood at about $2.3 billion.

Tokenized Equities and 24/7 Trading Demand

More than half of tokenized equity trading happened outside regular US market hours, and about 80% of trades involved less than one share. Overnight price moves also showed up in traditional stock prices soon after markets opened, hinting at useful price signals. Even so, tokenized equities were far less liquid and showed about 1.5 times the realized volatility of their traditional counterparts.

Calls for Clearer Rules and Earlier Warnings

The IMF urged clearer legal and regulatory frameworks, better interoperability and stronger safeguards. It has raised concerns before, in November 2025, April and July, and European regulators have voiced similar worries.