The International Monetary Fund said tokenized equity markets exhibit roughly 1.5 times the realized volatility of their traditional counterparts, warning that further growth could amplify systemic risk through interconnected leverage.

In a Thursday analysis, the Fund said tokenized financial markets remain small relative to traditional venues but are expanding rapidly, with poor interoperability and a lack of widely accepted settlement assets among the chief obstacles to scale. Outstanding tokenized real-world assets (RWAs) reached approximately $65 billion as of July, a fraction of the roughly $300 trillion in global capital-market assets.

How big is tokenized trading activity?

• Tokenized repurchase agreements (repos) average $300 billion to $350 billion in daily volume.
• Broader US repo markets trade roughly $13 trillion daily.
• Tokenized credit outstanding: $30.4 billion.
• Tokenized money market funds: $17.5 billion.
• Tokenized equities: $2.3 billion.

What trading patterns is the IMF seeing?

The IMF found more than half of tokenized equity trading occurs outside regular US market hours. Roughly 80% of trades involve less than one share, indicating retail-driven fractional ownership.

Overnight price movements in tokenized equities appeared in traditional stock prices shortly after markets opened, the Fund said, suggesting tokenized venues provide useful price discovery outside standard sessions. Tokenized equities also remain significantly less liquid than their underlying stocks.

The IMF cautioned that as adoption expands, greater interconnectedness and leverage could magnify traditional financial risks, including fire sales, liquidity runs and contagion.

What have regulators said previously?

The Fund has raised similar concerns in successive reports. In November 2025, it warned that automated trading and interconnected smart contracts could amplify volatility and flash crashes. An April analysis cautioned that faster settlement could accelerate financial stress. A July study highlighted systemic risks from fragmented platforms and insufficient regulatory coordination.

European regulators have echoed those concerns. Last month, the European Securities and Markets Authority (ESMA) warned that links between crypto and traditional finance, including through tokenized equities, could transmit distress across markets.

What is the IMF asking for?

The Fund called for clearer legal and regulatory frameworks, greater interoperability between tokenized and traditional financial systems, and safeguards addressing emerging vulnerabilities as adoption expands. It also said systemic risk currently remains limited because tokenization's footprint is still small.

"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 IMF authors concluded in Thursday's blog post.

The next operational test of those prescriptions will come as ESMA and national authorities translate the warnings into binding rules for tokenized equity issuers and the venues operating around the clock.