The International Monetary Fund (IMF) has endorsed the utility of tokenized stocks for 24/7 trading access, citing that more than half of trading in tokenized equities takes place outside regular market hours. According to the IMF's recent report, tokenized securities allow users to trade traditional stocks without requiring a brokerage account, with the demand for round-the-clock access being real. Beyond trading flexibility, the IMF noted that tokenized securities trading involves sizes smaller than one share, suggesting fractional ownership uptake that enables retail participation in financial markets with lower entry costs. This endorsement comes as the current tokenized markets, including credit, commodities, and stocks, account for $60 billion in supply, compared to the traditional global market worth $300 trillion in assets.
Research firm Citrini Research has identified a significant opportunity in tokenization, arguing that bringing stocks, bonds and other financial assets onto blockchains could create new businesses in trading, lending and payments. According to the firm's 79-page report titled Breaking the Wall, published Thursday, tokenization turns traditional assets into digital tokens that can move between financial platforms and potentially trade around the clock. The report notes that Real World Assets (RWAs) are the product of taking any asset, be it gold, NVIDIA stock, US treasuries or debt, and making it globally available, 24/7, on the blockchain, with price discovery happening outside of the traditional financial system. Despite the promising growth potential, the IMF warns that tokenized markets today remain relatively illiquid and exhibit higher volatility than their traditional counterparts.
The IMF identified significant structural challenges that could prevent tokenized markets from scaling effectively. According to the report, issuance is dominated by the U.S. and a few major offshore jurisdictions, while products are siloed across select crypto platforms and networks that do not communicate with each other. The IMF notes that fragmentation across various platforms, and the lack of both interoperability and common settlement assets undermine the network effect that could help tokenized markets grow faster. These factors could derail tokenized markets from fully scaling, as the global lender emphasized that the challenge is building markets that are also deep, liquid, and resilient. The IMF has always echoed the potential risk the segment could pose to global financial market stability if not well legislated and monitored.
To address the challenges and advance the tokenization sector, the IMF called for proactive policies across countries that would include clarifying legal rights linked to tokenized assets. The report notes that tokenization may yet transform finance, but its future will be determined less by technological possibilities than by policies that ensure market depth, trust, and sound safeguards. The U.S. has already clarified some of the rules tied to the sector and has even launched an 'innovation exemption' to scale and export its financial markets, while other jurisdictions such as the EU are also following the United States' steps. The IMF believes that the question for investors should shift from 'will tokenization be legal?' toward 'who captures the economics when these products eventually enter the US?'
