Tokenization boosts cross-border payments but heightens financial stability risks, IMF warns

The IMF warned that shocks in crypto-asset markets can transmit more rapidly than through traditional financial systems, potentially leaving regulators less time to intervene. In the same context, the IMF said tokenization could improve cross-border payments and support the development of financial markets in emerging economies, while also cautioning that it may increase capital-flow volatility and weaken monetary sovereignty.

IMF findings on tokenization and financial stability

In a 23-page report published on Thursday, the IMF argued that tokenizing real assets (excluding stablecoins) into tokens could remove bottlenecks in the financial system and increase transparency. However, it said the technology also introduces new challenges for financial stability.

“The overall impact of tokenization on financial stability remains not yet clearly established,” the IMF said. The report noted that real-time payments and greater data transparency can reduce some traditional risks, but the speed of processing and the high level of automation can also create new forms of risk.

Faster transmission of shocks and shifting risk

The IMF highlighted that disruptions in crypto-asset markets may spread faster than in conventional financial systems, reducing the time available for regulatory response. It also said tokenization changes where risk sits: rather than being concentrated in traditional banking, risks can shift toward distributed ledger platforms and smart-contract code.

Market data and projections

RWA.xyz data cited in the report showed that the value of tokenized real assets (excluding stablecoins) has surpassed $27.6 billion.

Earlier forecasts cited alongside the IMF report included a 2022 Boston Consulting Group estimate that the tokenization market could reach $16 trillion by 2030, and a 2024 McKinsey & Company scenario projecting a more cautious outcome of around $2 trillion over the same period.

Potential benefits and risks for policy

The IMF acknowledged that tokenization is expanding how assets are issued, traded, settled, and managed, as well as enabling other financial products. Beyond potential benefits such as faster cross-border payments and broader access to financial services, the IMF warned that tokenization could:

• Heighten capital-flow volatility
• Promote digital dollarization
• Undermine the effectiveness of national monetary policy

Industry momentum and platform examples

The report noted that major financial institutions are supporting tokenization initiatives. BlackRock CEO Larry Fink has pushed for bringing all asset classes onto the chain, including stocks, bonds, money-market funds, and real estate.

CryptoDep data (as of April 1) showed that the largest real-world asset (RWA) by total value locked is Securitize at about $3.38 billion. Behind it are Tether Gold at $3.35 billion and Ondo Finance at $3.21 billion.

BlackRock selected Securitize as the transfer and governance platform for its first tokenized fund on Ethereum, named BUIDL (BlackRock USD Institutional Digital Liquidity Fund).

Intercontinental Exchange, the parent company of the NYSE, also announced plans to launch a tokenization platform designed to enable 24/7 trading of stocks and ETFs, with near-instant settlement through a blockchain-based post-trade system.

Regulatory barriers remain a key constraint

The IMF said legal and regulatory barriers are among the biggest challenges for market development. It warned that without clear rules on asset ownership and trade finality, tokenization risks fragmentation and peripheral operation.