IMF: Tokenized assets hit $65B but face liquidity, volatility and legal hurdles
Tokenized markets grow, but so do red flags
The International Monetary Fund released an analysis on Oct 8 warning that tokenized financial markets carry risks that could slow their growth, even as the space gains attention.
Tokenization converts real-world assets like stocks, bonds and funds into digital tokens on a blockchain. It promises faster settlement and the ability to trade around the clock, but the IMF said legal uncertainty and risks to financial stability remain significant barriers.
Key numbers
- Outstanding tokenized real-world assets (RWAs) reached approximately $65 billion as of July 2026, a fraction of the roughly $300 trillion in global capital-market assets.
- Tokenized credit made up $30.4 billion, money market funds $17.5 billion, and tokenized equities about $2.3 billion.
- Tokenized repurchase agreements (repos), where lenders exchange securities for short-term cash loans, averaged $300 billion to $350 billion in daily volume — far below the roughly $13 trillion traded daily in the broader US repo market.
- More than half of tokenized equity trading happened outside regular US market hours.
- Roughly 80% of tokenized equity trades involved less than one share, showing heavy fractional ownership.
What the IMF analysis says
The IMF's blog post outlined several concerns about tokenized equities. Trading was significantly less liquid than in traditional markets, and realized volatility was about 1.5 times higher than that of traditional counterparts.
The fund noted that overnight price movements in tokenized equities appeared in traditional stock prices shortly after markets opened, suggesting tokenized markets can provide useful signals outside regular hours. However, it warned that as tokenized markets grow, greater interconnectedness and leverage could amplify traditional financial risks, including fire sales, liquidity runs and contagion.
The IMF called for clearer legal and regulatory frameworks, better interoperability between tokenized and traditional financial systems, and safeguards to address emerging vulnerabilities. It added that systemic risks currently remain limited because overall adoption is still small.
Regulators have flagged these concerns before
This is not the first time the IMF has raised alarms about tokenization. In November 2025 it warned that automated trading and interconnected smart contracts could amplify flash crashes. In April it cautioned that faster settlement could accelerate financial stress. A July analysis highlighted systemic risks from fragmented platforms and insufficient regulatory coordination.
European regulators have raised similar concerns. In September, the European Securities and Markets Authority (ESMA) warned that growing links between crypto and traditional finance, including through tokenized equities, could increase the risk of financial shocks spreading across markets.
What is confirmed and what remains unclear
The figures on tokenized asset values, trading volumes and volatility are drawn directly from the IMF's published analysis. The IMF's warnings about potential systemic risks and its calls for clearer regulation are official positions stated in the report.
It remains unclear how quickly tokenized markets will grow or whether regulators will act on the IMF's recommendations in the near term. The report notes that current systemic risks are limited by small adoption levels but does not predict when or whether that could change.
Why this matters
The IMF's report underscores that tokenization is moving from niche experimentation toward real market activity, especially in areas like 24/7 equity trading and fractional ownership. But the same features that make it appealing — speed, accessibility, and connectivity — could also spread problems faster if safeguards are not put in place.
The IMF concluded: "Tokenization may yet transform finance, but its future will be determined less by technological possibilities than by policies that ensure market depth, trust, and sound safeguards."
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.