IMF: Tokenized markets stay small and fragmented, stablecoins a weak link

The International Monetary Fund (IMF) released a comprehensive analysis in its October Global Financial Stability Report highlighting the rapid expansion and inherent risks of the tokenized real-world asset (RWA) market. As of July, public tokenized assets reached approximately $65 billion, with fixed-income instruments accounting for $48 billion and equities trailing at $2.3 billion. The report notes that tokenized repurchase agreements see daily volumes of $303 billion, though this remains a fraction of the $13 trillion traditional U.S. repo market. Analysis of products from issuers like Ondo Finance and xStocks revealed that tokenized equities exhibit 1.5 times higher volatility than traditional counterparts, with retail investors driving 24/7 fractional trading. The IMF expressed significant concern regarding the use of stablecoins and private deposit tokens for settlement, warning that these methods introduce contagion and concentration risks. To mitigate these vulnerabilities, the IMF advocates for the use of central bank money for settlement and suggests implementing technology-neutral supervision and liquidity buffers. This report arrives as industry players like the OKX and Intercontinental Exchange joint venture prepare to launch 24/7 tokenized stock venues under SEC innovation exemptions. These findings serve as a critical regulatory roadmap for emerging frameworks, such as South Korea's upcoming token-securities initiative.