The International Monetary Fund said in a new report that tokenization could reshape both crypto markets and traditional finance, while also importing crypto-related vulnerabilities into the broader financial system. The report frames tokenization as more than a market plumbing upgrade: if assets such as money, bonds, and funds move onto shared blockchains, trades can reach instant settlement, reducing the intermediaries and delays embedded in current market structure.
According to the IMF, this form of “atomic settlement” may reduce counterparty risk, but it also forces firms to manage liquidity on a real-time basis. The report says stress episodes could unfold faster, leaving less room for discretionary intervention. On that basis, the IMF argues that stability in tokenized asset management depends on safe settlement assets, legally recognized settlement finality, and strong governance arrangements.
Stablecoins seen as a main bridge into tokenized finance
The report identifies stablecoins as a central link between crypto markets and traditional finance. These fiat-pegged tokens could become widely used settlement assets across tokenized platforms, the IMF said. Their reliability, though, still rests on reserve backing and redemption systems. Under market stress, that leaves them exposed to run risk. In a tokenized financial setup, that weakness could matter well beyond the crypto sector.
Automation and smart contracts may speed up selloffs
The IMF also warned that faster and more automated market structures could amplify volatility. Smart contracts that trigger margin calls or liquidations may accelerate selling during downturns, pushing declines through the system at greater speed. The report notes that crypto markets have already shown this pattern. If tokenized assets keep expanding, those dynamics may no longer remain confined to on-chain trading venues.
Another concern is the cross-border nature of tokenized assets. Because they can move instantly across jurisdictions, supervision becomes harder and policy risks increase. The IMF said emerging markets could face concerns tied to capital flight and currency substitution. It called for clearer legal frameworks and stronger international coordination, saying tokenized finance could deepen fragmentation instead of improving efficiency if those safeguards are missing.
Tokenization has already become a major theme in the crypto sector. Data from DeFiLlama shows real-world assets placed on blockchain rails have surpassed $23.2 billion. Excluding stablecoins, most of that total is made up of tokenized gold and money market funds.