The International Monetary Fund published a report stating tokenization could improve financial efficiency and transparency while also posing new risks to stability. The agency noted the current market size and outlined potential legal and operational challenges. Major financial firms, including BlackRock and the New York Stock Exchange’s parent company, are actively advancing the tokenization of real-world assets.
The International Monetary Fund stated tokenization has the potential to remove friction and boost transparency in finance. It also warned the technology could create challenges affecting financial stability.
“The net effect of tokenization on financial stability is uncertain,” the IMF said in a report. It stated atomic settlement and enhanced transparency reduce some risks, but speed and automation introduce new ones.
More than $27.6 billion worth of real-world assets is currently tokenized onchain, according to data from RWA.xyz. Market estimates vary significantly, with Boston Consulting Group predicting a $16 trillion market by 2030.
The IMF acknowledged tokenization expands how financial products are issued and managed. It said the technology shifts risks from the banking system to shared ledgers and smart contract code.
“Stress events in tokenized markets are likely to unfold faster than in traditional systems, leaving less time for discretionary intervention,” the agency noted. It also said tokenization offers opportunities in emerging markets but raises risks like volatile capital flows.
Blockchain tokenization has been advocated by Wall Street leaders such as BlackRock CEO Larry Fink. The biggest RWA project by total value locked is Securitize, the platform behind the BlackRock USD Institutional Digital Liquidity Fund, at $3.38 billion.
Tether Gold and Ondo Finance are close behind at $3.35 billion and $3.21 billion, respectively. The New York Stock Exchange‘s parent, Intercontinental Exchange, announced it would launch a tokenization platform for 24/7 trading.
The IMF said legal challenges present another obstacle for tokenization. Without clarity over ownership records and settlement finality, tokenized markets risk being fragmented.
The crypto industry has been developing solutions like the Ethereum ecosystem’s ERC-3643 permissioned token standard. Coinbase Asset Management launched tokenized shares for its Bitcoin Yield Fund using this standard via Apex Group for compliance checks.
