In a new blog post based on its October 2026 Global Financial Stability Report, the International Monetary Fund (IMF) identifies four mutually reinforcing conditions for tokenized markets to realize their potential: legal certainty, regulatory clarity, interoperability and access to safe, widely accepted settlement assets. Tokenized markets are growing rapidly but remain small, fragmented, less liquid and more volatile than traditional markets. Tokenized repurchase agreements account for most activity, averaging USD 300 billion to USD 350 billion in daily transaction volume, while other tokenized assets total about USD 65 billion. More than half of tokenized trading occurs outside traditional market hours, and around 80% of the tokenized equity trades analyzed were smaller than one share, indicating demand for continuous trading and fractional ownership. Fragmentation across platforms, networks and settlement arrangements, however, weakens liquidity, price formation and network effects. The IMF calls for a technology neutral policy approach that clarifies enforceable rights, applies consistent regulation to similar activities and supports interoperability with traditional financial systems. Policymakers should also monitor interconnectedness, leverage and liquidity vulnerabilities because greater scale and compressed market processes could amplify fire sales, runs and contagion while removing some buffers embedded in sequential trading and settlement.
International Monetary Fund outlines legal, regulatory and settlement conditions for tokenized markets to scale safely
The International Monetary Fund identifies legal certainty, regulatory clarity, interoperability and safe settlement assets as prerequisites for tokenized markets to scale. Current markets remain small and fragmented despite demand for round-the-clock trading and fractional ownership. Technology neutral regulation and stronger safeguards are needed to contain liquidity, leverage and contagion risks as adoption grows.