IMF warns $65.1 billion tokenized asset market could amplify shocks through auto-liquidation

The International Monetary Fund said in Chapter 3 of its October 2026 Global Financial Stability Report that tokenized real-world assets had reached about $65.1 billion as of July 31, excluding repurchase agreements and stablecoins. Within that total, tokenized credit stood at $30.4 billion, money market funds at $17.5 billion, and tokenized equities at $2.3 billion. The IMF said several design features in tokenized markets could intensify stress when conditions deteriorate. It pointed to auto-liquidation, instant settlement, continuous trading, and programmable collateral as mechanisms that may accelerate forced unwinds and magnify financial shocks. The report also warned that reusing collateral across platforms could increase leverage and allow risks to spread more quickly across institutions and markets. The IMF identified four obstacles to broader adoption in tokenized markets: legal certainty, regulatory clarity, blockchain interoperability, and reliable settlement assets. It recommended technology-neutral regulation, stronger oversight, circuit breakers, and measures to reduce instability tied to automated liquidation. The findings were cited by Bitcoin.com News and relayed by Odaily.