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IMF warns tokenized equity markets may be less liquid and more volatile
The IMF said tokenized markets are expanding quickly but still small versus traditional venues, citing interoperability gaps and limited widely accepted settlement assets.
Cointelegraph reports that the International Monetary Fund warned tokenized equity markets could amplify financial risks as they grow.
In an analysis dated Thursday, the IMF said tokenized equity markets are less liquid and more volatile than traditional markets, even as demand for 24/7 trading increases.
The IMF noted that tokenization may improve trading and settlement efficiency, but legal uncertainty and broader risks to financial stability could slow adoption.
It also pointed to obstacles including poor interoperability and a lack of widely accepted settlement assets, and said the tokenization gap is visible in current trading activity.