The IMF warns that asset tokenization creates new financial vulnerabilities even as BlackRock and Wall Street accelerate adoption of blockchain technology.

In a report published on Thursday, the International Monetary Fund (IMF) argued that the impact of tokenization on financial stability remains “uncertain.” The institution highlighted that while automation and so-called “atomic settlement” could reduce traditional risks, they simultaneously create new vulnerabilities.

Tokenization—the process of representing real-world assets such as stocks, bonds, or real estate as digital tokens on a blockchain—is viewed as a key innovation. It has the potential to transform how financial instruments are issued, traded, and settled.

Balancing Efficiency and Risk

According to the IMF, the primary advantage of tokenization is the reduction of trading and operational frictions, alongside increased transaction transparency. This is particularly significant for emerging markets, where the technology could improve cross-border payments and access to financial services.

At the same time, however, the institution warns that shifting financial activities to decentralized ledgers and smart contracts could move risk outside the traditional banking system. In stress scenarios, this could lead to crises unfolding much faster, as automated processes leave less time for regulatory intervention.

Additionally, the IMF emphasized that tokenization could amplify capital flow volatility and accelerate the substitution of national currencies with digital assets. Such a shift challenges the ability of central banks to conduct effective monetary policy.

Wall Street Accelerates Adoption

Despite these warnings, major financial institutions are actively developing tokenization solutions. BlackRock CEO Larry Fink has been among the most vocal supporters of the idea of “tokenizing everything”—from traditional securities to money market funds and real estate.

Platforms like Securitize already manage billions of dollars in tokenized assets, including funds linked to BlackRock, while companies such as Ondo Finance and Tether Gold are also establishing leading positions in the segment.

In parallel, Intercontinental Exchange—the owner of the New York Stock Exchange—announced plans for a platform that will enable 24-hour trading and near-instant settlement through blockchain infrastructure, signaling an accelerating institutional transformation.

Despite this progress, the IMF warned that the lack of legal clarity regarding ownership and settlement finality remains a serious obstacle. Without clearly defined rules, tokenized markets risk remaining fragmented and outside the financial mainstream.

The tech industry is already seeking solutions to these issues through standards like ERC-3643, which allow for access control and regulatory compliance. Such initiatives indicate the sector is moving toward a more institutionalized framework.

Ultimately, the IMF views tokenization as both an opportunity and a challenge—a technology that can modernize global finance but requires careful management to avoid creating new systemic risks.