IMF warns tokenized markets could amplify financial stress

The IMF says tokenized markets could make trading and settlement faster and cheaper, but warns they may also amplify liquidity crises, fire sales and contagion as they expand. The risks to traditional finance remain limited for now because tokenized markets are small compared with global capital markets. By July 2026, tokenized real-world assets excluding stablecoins were worth about $65 billion, including roughly $48 billion in fixed-income products. Tokenized equities totalled about $2.3 billion, while tokenized repo trading averaged $300 billion to $350 billion a day. More than half of tokenized equity trading took place outside regular US market hours, and about 80% of trades involved less than one share. The IMF also said tokenized equity prices appeared to inform traditional stock prices after markets opened. However, tokenized equities had lower liquidity and around 1.5 times the realized volatility of conventional shares, which could make price swings sharper and exits harder for traders. The IMF identifies legal uncertainty, unclear regulation, fragmented platforms and limited safe settlement assets as barriers to growth. It also warns that greater links and leverage could transmit shocks to traditional finance. The report adds to the IMF’s public warnings on tokenization this year.