The IMF says tokenization — putting real-world assets like cash, bonds and funds onto blockchains — could reshape both crypto and traditional finance, but also bring new systemic risks that regulators aren’t yet prepared to handle.
In a new report, the fund argues tokenization is more than a technical upgrade. By shifting assets onto shared ledgers, transactions can settle instantly, removing intermediaries and the delays that define current markets. That “atomic settlement” can cut counterparty risk and force firms to manage liquidity in real time, the IMF warns — a dynamic that could make stress events unfold much faster and leave regulators and firms less time for discretionary intervention.
Stablecoins are highlighted as a likely bridge between tokenized platforms and legacy finance. Widely used as settlement assets, their reliability hinges on reserve quality and redemption mechanisms, making them vulnerable to runs during periods of stress. The report also flags how automation and smart contracts — for example, triggers for margin calls or liquidations — could amplify volatility and accelerate selloffs, a pattern already visible in crypto markets.
Cross-border implications are another major concern. Tokenized assets can move instantly across jurisdictions, complicating oversight and increasing risks of capital flight and currency substitution in emerging markets. Without clear legal finality and harmonized global rules, the IMF cautions, tokenization could deepen market fragmentation rather than improve efficiency.
The trend is already growing: DeFiLlama data shows real-world assets on blockchain rails have topped $23.2 billion, with most of that (excluding stablecoins) tied to tokenized gold and money market funds. The IMF’s bottom line is a call for stronger legal frameworks, recognized settlement finality, robust governance, and international coordination to ensure tokenized finance evolves safely rather than amplifies systemic vulnerabilities.
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