IMF: Tokenization May Push Crypto-Style Risks Into Global Finance

Tokenization—putting real-world assets on a blockchain—could transform both crypto and traditional financial markets, but regulators may not yet be prepared for the risks it introduces, the International Monetary Fund said in a new report. The IMF argued tokenization is more than a technical tweak. Shifting assets such as money, bonds and funds onto shared blockchains could enable near-instant settlement, reduce reliance on intermediaries, and cut delays common in today's market infrastructure. The report said tokenization's "atomic settlement" could reduce counterparty risk and push firms to manage liquidity in real time. "Stress events are likely to unfold faster, leaving less time for discretionary intervention," it said, adding that stability will require tokenized-asset activity to remain anchored in safe settlement assets, legally recognized finality, and strong governance. Stablecoins—tokens pegged to fiat currencies—were highlighted as a key link between crypto and mainstream finance and could become widely used settlement assets on tokenized platforms. The IMF cautioned that their robustness hinges on the quality of reserves and redemption mechanisms, which can leave them vulnerable to runs in periods of stress. The IMF also warned that faster, automated markets could intensify volatility. Smart contracts that automatically trigger margin calls or liquidations may accelerate selloffs during downturns, a pattern already observed in crypto markets. Because tokenized assets can move across borders quickly, oversight becomes more complex, the report added, raising risks of capital flight and currency substitution in emerging markets. The IMF called for clearer legal frameworks and stronger international coordination, warning that without them, tokenized finance could increase fragmentation rather than deliver efficiency gains. Tokenization has been gaining momentum in the crypto industry. Real-world assets on blockchain rails have surpassed $23.2 billion, according to DeFiLlama. Excluding stablecoins, most of that total consists of tokenized gold and tokenized money market funds.