The IMF recognizes the benefits of tokenization, which allows financial assets to be represented on programmable digital ledgers, while warning of the risks of rapid propagation of financial tensions. In its October 2026 financial stability report, the institution notes that tokenized markets remain fragmented, which reduces liquidity and increases volatility compared to traditional markets. Approximately 80% of orders on these markets involve less than one share, and over half of transactions occur outside traditional trading hours. While automation can reduce counterparty risk through simultaneous settlement, it can also accelerate forced selling during price declines. The IMF identifies four conditions for market development: legally recognized rights, clear rules, interoperable infrastructure, and secure settlement mechanisms.
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