The International Monetary Fund has released a 23-page report acknowledging that tokenization holds significant promise for the financial sector while simultaneously cautioning that it could introduce new risks to financial stability. The agency stated that atomic settlement and enhanced transparency reduce certain traditional risks, but that the speed and automation enabled by the technology create fresh challenges. The IMF concluded that the overall impact on financial stability remains uncertain.
Tokenization refers to the process of representing real-world assets on a blockchain, and the market has already grown substantially. Data from RWA.xyz shows that more than $27.6 billion worth of real-world assets, excluding stablecoins, are currently tokenized onchain. Estimates of the market’s future size vary widely, with Boston Consulting Group projecting it could reach $16 trillion by 2030 and McKinsey & Co offering a more conservative forecast of $2 trillion over the same period.
The IMF recognized that tokenization broadens how securities and other financial products are issued, traded, settled, and managed. However, the agency noted that this shift moves risks away from the traditional banking system and onto shared ledgers and smart contract code. The report also highlighted opportunities in emerging markets, including faster cross-border payments and greater financial inclusion, while warning of risks such as volatile capital flows, rapid currency substitution, and erosion of monetary sovereignty.
Several major financial institutions have already moved to embrace tokenization. BlackRock CEO Larry Fink has been among the most prominent advocates, pushing to tokenize assets ranging from stocks and bonds to money market funds and real estate. The largest real-world asset project by total value locked is Securitize, the tokenization platform behind the BlackRock USD Institutional Digital Liquidity Fund, which holds $3.38 billion according to CryptoDep citing data from April 1. Tether Gold and Ondo Finance follow closely at $3.35 billion and $3.21 billion, respectively.
Intercontinental Exchange, the parent company of the New York Stock Exchange, announced in January that it plans to launch a tokenization platform enabling around-the-clock trading and instant settlement of stocks and exchange-traded funds using a blockchain post-trade system. The move signals growing institutional interest in integrating distributed ledger technology into mainstream market infrastructure. Such developments reflect a broader trend of traditional finance exploring blockchain-based solutions.
Despite this momentum, the IMF identified legal uncertainty as a significant barrier to the technology’s broader adoption. Without clear legal frameworks governing ownership records and settlement finality, the agency warned that tokenized markets risk becoming fragmented and remaining on the periphery of the financial system. Resolving these questions is seen as essential for tokenization to achieve mainstream relevance.
The crypto industry has been working to address compliance and legal challenges through technical standards. The Ethereum ecosystem’s ERC-3643 permissioned token standard is one such solution, designed to restrict access to tokenized products to eligible investors only. Coinbase Asset Management used this standard when it launched tokenized shares for the Coinbase Bitcoin Yield Fund on Ethereum layer 2 Base on March 20, with financial services firm Apex Group implementing ERC-3643 to verify token holder identity and ensure regulatory compliance.
Originally reported by CoinTelegraph.
