IMF Warns: Four Key Risks or Shocks of Tokenized Finance Could Hit the Global Financial System

Gate News message: The International Monetary Fund (IMF) warned in its latest report that tokenized finance is reshaping the global financial system, but it also brings four major risks. IMF financial adviser and Director of the Monetary and Capital Markets Department Tobias Adrian said that tokenization could exacerbate fragmentation and interoperability issues; multiple platforms lack unified standards; liquidity may be dispersed in digital silos, reducing asset convertibility and net settlement efficiency.

The report also notes that tokenized systems may increase financial stability risks. Automated margin calls, continuous settlement, and algorithm-driven feedback loops will compress intervention time during market stress events; traditional end-of-day buffering mechanisms disappear, allowing shocks to spread rapidly in highly interconnected markets. The IMF emphasized that public institutions play a key role in advancing common protocols and cross-border atomic settlement, and that a lack of international coordination could worsen global financial inefficiencies.

The third risk concerns cross-border settlement. Tokenized transactions cross multiple jurisdictions, using a shared ledger, but settlement authority remains controlled by individual countries; this mismatch could trigger jurisdictional conflicts or system gridlock. The fourth risk is the challenge for emerging market and developing economies (EMDEs). Dollar-denominated stablecoins may accelerate currency substitution and volatility in capital flows, weakening monetary sovereignty in countries with less resilient financial systems.

The IMF proposed a five-part policy roadmap, including settling anchored to safe money, implementing consistent regulation, establishing legal certainty, promoting interoperability standards, and adjusting central bank liquidity tools to suit an around-the-clock automated environment. The report stressed that the window to shape tokenized finance is still open, but market growth is rapid. Over the past month, the total value of on-chain distributed risk-weighted assets (RWA) increased by 4%, reaching $26.7 billion, representing a 31.61% surge in asset value and growing the number of asset holders to 710,792.