IMF warns of liquidity risks in tokenized stocks despite 24/7 trading appeal

An International Monetary Fund report released on October 8, 2026, highlights growing retail interest in tokenized stocks, driven by round-the-clock trading and fractional share access. Over half of tokenized equity volume occurs outside traditional market hours, and 80% of trades involve partial shares. However, tokenized equities exhibit 1.5 times the volatility of traditional shares, thin liquidity, and platform fragmentation across non-interoperable networks, prompting IMF calls for technology-neutral regulatory safeguards.

Scale of tokenized asset markets

• ▪Tokenized repurchase agreement daily trading volume averaged between $300 billion and $350 billion in 2026, compared to roughly $13 trillion traded daily in traditional United States repo markets.
• ▪As of July 2026, non-repo tokenized real-world assets totaled approximately $65 billion, including $30.4 billion in credit products, $17.5 billion in money market funds, and $2.3 billion in equities.

Trading patterns of tokenized equities

• ▪More than 50% of trading volume in tokenized equity markets takes place outside regular United States market hours.
• ▪Overnight price movements in tokenized equities are absorbed into traditional equity opening prices shortly after regular stock exchanges open.
• ▪Approximately 80% of analyzed tokenized equity trades were executed in transaction amounts smaller than a single full share.

IMF findings and recommendations

• ▪The International Monetary Fund warned that instant settlement on blockchain networks eliminates traditional operational time buffers, potentially accelerating fire sales, liquidity runs, and financial contagion.
• ▪On October 8, 2026, the International Monetary Fund published an analytical chapter of its Global Financial Stability Report outlining how tokenization can collapse clearing and settlement processes into a single step.
• ▪The International Monetary Fund urged regulators to implement technology-neutral supervision, create regulatory sandboxes, clarify legal rights for tokenized assets, and encourage safe central bank settlement assets.
• ▪The International Monetary Fund found that tokenized equities exhibited roughly 1.5 times the realized volatility of traditional stocks, with decentralized exchanges showing the weakest liquidity.

Structural limitations of tokenized markets

• ▪Tokenized asset issuance and trading activity are heavily concentrated in the United States and select offshore hubs rather than broadly distributed across international jurisdictions.
• ▪Tokenized trading platforms remain siloed across incompatible blockchain networks that cannot communicate, fragmenting liquidity pools and limiting overall market scale.

Debatable claims

• ▪The benefits of 24/7 tokenized trading outweigh its increased price volatility
• ▪Instant settlement in tokenized asset markets poses unacceptable risks to financial stability
• ▪Regulators should require central bank money for settling tokenized securities