IMF warned that tokenization is reshaping financial architecture rather than merely improving payment speed, as assets and liabilities shift onto shared digital ledgers in modern markets.
In a July 2 blog post, Tobias Adrian, the IMF’s financial counselor and director of the Monetary and Capital Markets Department, said processes that now occur in sequence could be executed by software once tokenized systems become widely used.
The warning centered on the risk that poor policy choices could split global finance into incompatible systems. Adrian said tokenization may move risk away from bank and fund balance sheets and toward companies operating tokenized platforms. The IMF said policy frameworks should adapt before financial markets migrate at scale.
Tokenized Assets Raise Settlement Questions
The IMF identified three possible settlement anchors for tokenized finance, namely tokenized bank deposits, stablecoins, and tokenized central bank reserves. Each option carries limits that current rules may not fully address.
Tokenized bank deposits preserve existing bank liabilities and fit within current regulatory structures. Yet Adrian said they would require real-time liquidity management across a 24/7 market. Stablecoins offer programmability and broader reach, but their stability depends on reserve quality and issuer resilience.
The third model, tokenized central bank reserves, reduces credit risk in the settlement layer. Also, it would require central banks to operate or oversee programmable infrastructure beyond traditional payment systems. Adrian said none of the options offers a simple solution.
IMF Says 24/7 Markets Need Clearer Rules
The IMF also warned that continuous settlement could remove safeguards built into existing market cycles. Traditional finance still depends on business-day schedules, overnight windows, end-of-day reconciliation, and next-day clearing. Tokenization can reduce friction, but Adrian said it may also remove buffers that help manage liquidity and operational risk.
The report said regulators must clarify who controls liquidity on tokenized infrastructure and where moral hazard may appear. It also said markets need certainty on whether a tokenized record is final proof of ownership and legally recognized across jurisdictions.
Without those legal answers, the IMF said tokenization could remain fragmented instead of becoming a reliable base for global finance. Disputes also need clear rules on which jurisdiction applies.
Emerging Economies Face Sovereignty Risks
The IMF flagged greater risks for developing economies, where cross-border tokenized flows could increase volatile capital movements. Adrian said privately issued stablecoins could accelerate currency substitution if domestic safeguards are weak.
That risk could weaken monetary sovereignty by shifting local users toward foreign-linked digital assets. The IMF said regulators must address these vulnerabilities before adoption widens.
U.S. regulators are considering how existing securities rules apply to tokenized assets, while major financial institutions are building infrastructure. The IMF’s warning leaves policy design at the center of the shift as tokenization advances.
