IMF Finds Demand for Tokenized Stocks, Flags Liquidity Risks

The International Monetary Fund’s October 2026 stability report found that tokenized U.S. equities attract trades outside regular market hours and purchases of less than one share, but remain less liquid and more volatile than conventional stocks. A token represents a financial claim on a digital ledger: trades and transfers can be recorded through shared infrastructure, reducing the need for separate systems to reconcile records. In its chapter on scaling tokenization, the IMF says the market’s small size and fragmented venues still limit those benefits.

What demand did the IMF find?

More than half of tokenized equity trading took place outside regular U.S. market hours, and about 80% of trades were for less than one share. The IMF read those patterns as evidence of demand for round-the-clock access and fractional ownership. The tokens function like entries in a shared transaction log: buyers can trade fractions on digital venues while traditional exchanges are closed.

The report examined five liquid tokenized U.S. equities. It found that overnight price moves in those tokens carried information about the underlying shares. Estimates suggest traditional stocks absorbed 87% to 99% of that information within the first five minutes after the U.S. market opened. The IMF cautioned that the market is still at an early stage, so the findings should be interpreted carefully.

Why are tokenized shares still harder to trade?

The IMF found tokenized equities were about 1.5 times as volatile as equivalent stocks traded on traditional exchanges. They were also less liquid, especially on decentralized exchanges. The report measures illiquidity by how much prices move for a given trading volume: thinner markets mean a trade can have a larger price impact.

Some of the volatility gap reflects different trading hours. Tokenized venues operate around the clock, including overnight and weekends, while the traditional comparison covers U.S. market hours. The IMF also found that prices generally stayed close to their traditional counterparts during overlapping trading hours, though decentralized venues showed wider deviations.

What needs to change before the market can scale?

The IMF points to four connected constraints: clear legal rights to tokenized assets, regulatory clarity, interoperability between platforms, and safe settlement arrangements. Today, trades are spread across networks, venues and custodians that may not connect. That fragmentation can keep liquidity in separate pools even when the token represents a familiar stock.

The report says tokenization could automate record reconciliation, dividend payments and collateral transfers. But continuous trading and automated margin calls or liquidations could also make a shock harder to contain. The IMF estimates tokenized equities at about $2.3 billion as of July 2026, within a public tokenized real-world asset market of roughly $65 billion. CoinDesk’s report on the findings also notes the market’s gaps in liquidity and settlement systems. The market’s size and structure have changed enough to show use beyond regular exchange hours; the next test is whether legal rules, settlement and links between venues can support deeper trading.

References

• chapter on scaling tokenization — imf.org
• CoinDesk’s report on the findings — coindesk.com