IMF Report Highlights Demand and Risks for Tokenized Stocks

The International Monetary Fund (IMF) has published a report acknowledging growing demand for tokenized U.S. equities but warning the market remains volatile and illiquid.

The IMF found that tokenized stocks are being used for their promised benefits, with over half of trades occurring outside regular market hours and roughly 80% involving less than one full share. The report noted that overnight price movements in tokenized assets often carry useful information, with more than 85% of those moves reflected in conventional share prices within five minutes of the market opening.

Despite this demand, the institution characterized the tokenized equities sector as a small and fragmented market. It identified significant risks, including low liquidity, price volatility, and a lack of robust legal frameworks and settlement systems compared to traditional markets.

The IMF concluded that while tokenization could improve settlement efficiency and automation in finance, the sector requires stronger safeguards for legal certainty, liquidity, and interoperability between different blockchain systems to mature.