IMF finds over half of tokenized US stock trading happens after Wall Street closes
RWA Signal Insight
StocksThe International Monetary Fund (IMF) recently analyzed the tokenized US equity market, revealing that over 50% of trading volume occurs outside traditional Wall Street hours. By examining $345 million in tokenized assets from issuers like Ondo and xStocks, the report highlights a strong demand for 24/7 access and fractional ownership, with 80% of transactions involving less than one share. While tokenized prices effectively signal future market movements, the study identified significant challenges, including 50% higher realized volatility compared to traditional stocks. Fragmented liquidity across centralized and decentralized venues remains a primary concern, particularly as automated systems could trigger forced liquidations during low-liquidity periods. The IMF emphasizes that while systemic risks are currently limited, the expansion of continuous trading requires robust regulatory safeguards like circuit breakers. This analysis underscores the growing influence of blockchain-based securities on global financial stability and market efficiency. Ultimately, the findings provide a critical benchmark for understanding how tokenized assets interact with conventional capital markets.
Key points
- IMF report shows 50% of tokenized US stock trading occurs outside standard market hours.
- 80% of tokenized equity transactions involve fractional shares under one unit.
- Tokenized equities exhibit 50% higher realized volatility than traditional counterparts.
- Overnight tokenized price movements show 87% to 99% correlation with next-day market openings.
Background
Tokenized equities are blockchain-based digital representations of traditional stocks, often providing investors with fractional ownership and continuous trading capabilities. These assets typically rely on smart contracts to track the price performance of underlying securities, allowing for 24/7 market access that bypasses the limitations of traditional exchange operating hours.