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IMF Warns Tokenization Can Speed Markets and Amplify Systemic Risk

The fund says regulators must set clear rules on ownership, settlement finality, code oversight, interoperability, settlement assets to prevent faster settlement from concentrating risk.

Overview

  • The IMF published a blog on July 2 warning that representing real-world assets on programmable ledgers can remove settlement buffers and make shocks propagate faster than today.
  • Industry data cited this week estimate about $60 billion of tokenized products but show the market is highly concentrated and much of the value has little or no transfer activity.
  • Large banks and asset managers are pushing pilots and planned rollouts, including a Clearing House tokenized deposit network reported to target first-half 2027 availability, which raises near-term policy urgency.
  • The IMF flagged specific dangers: risk shifting from bank balance sheets to platforms and smart-contract code, greater operational and cyber risk from concentrated infrastructure, and volatile cross-border flows that could hurt emerging economies.
  • The fund recommends concrete policy work on legal ownership, settlement finality, oversight of critical code, interoperability standards, and liquidity backstops so tokenization strengthens rather than fragments global finance.