IMF Finds Strong Demand for Tokenized Stocks, Warns Market Remains Volatile and Illiquid

Investors are leveraging blockchain-based shares for after-hours trades and fractional ownership, but the International Monetary Fund cautions that liquidity, legal frameworks, and settlement systems have yet to catch up.

Tokenized stocks are actively delivering on two of the cryptocurrency sector’s long-promised benefits: round-the-clock trading and the accessibility of fractional share ownership. However, according to a comprehensive new study published by the International Monetary Fund (IMF), these digital assets are currently markedly less liquid and experience significantly higher volatility than the conventional equities they mirror.

The IMF’s latest Global Financial Stability Report, titled Scaling Tokenization: New Efficiencies and New Vulnerabilities, takes a close look at the five most actively traded tokenized U.S. equities. This evaluation includes major corporate names such as Tesla (TSLA), Nvidia (NVDA), and Alphabet (GOOG), alongside broader market measures like the Nasdaq 100 Index, tracking their performance across both centralized and decentralized trading venues.

The findings highlight a distinct shift in investor behavior facilitated by blockchain architecture. More than half of all tokenized trading volume analyzed by the IMF took place outside of regular U.S. market hours. Furthermore, approximately 80% of individual trades involved amounts smaller than a single share. In the context of the report, these metrics serve as clear evidence that retail and institutional investors deeply value 24/7 market access and lower financial entry points, looking well beyond the novelty of the underlying technology itself.

The research also uncovered important behavioral patterns between traditional and tokenized assets. Overnight price movements in tokenized stocks frequently carried valuable information regarding the trajectory of the underlying traditional shares. Once traditional U.S. markets officially opened, more than 85% of the overnight price movement registered in tokenized shares was fully reflected in their conventional counterparts within a mere five-minute window, according to the IMF.

Industry Growth and Emerging Adoption

While the utility is evident, industry leaders acknowledge that the ecosystem is still in its foundational stages. "Moving assets onchain is only the first step," observed Bitget CEO Gracy Chen. "The bigger question is how efficiently that capital can work once it is there."

The central message of the IMF report is that while the underlying use case is entirely real, the market itself remains deeply nascent. The institution noted that the broader tokenized real-world asset (RWA) market has expanded at a rapid pace, estimating its total valuation at approximately $65 billion as of July 31. Within that expanding ecosystem, tokenized equities accounted for roughly $2.3 billion. To put this into perspective, the global equity market capitalization for 2025 stood at just under $160 trillion, according to data from the Securities Industry and Financial Markets Association (SIFMA), the primary trade group representing the U.S. securities industry.

Despite the vast disparity in scale, the tokenization project continues to attract major institutional and corporate participants. Bullish (BLSH), a Gibraltar-based digital asset exchange and the parent company of CoinDesk, officially introduced tokenized equity trading to its platform in August. Earlier in October, OKX and the Intercontinental Exchange (ICE)—the corporate parent that owns and operates the New York Stock Exchange—filed formal plans for a dedicated venue designed to offer round-the-clock trading in tokenized U.S. shares.

These platforms are far from alone in pursuing this market segment. Prominent cryptocurrency exchanges, including Coinbase Global (COIN), Kraken, and Binance, already offer various forms of tokenized stock trading, as does retail brokerage giant Robinhood Markets (HOOD).

Even with this growing adoption, the structural realities of the market present notable hurdles. According to the IMF’s metrics, tokenized stocks traded at roughly 1.5 times the volatility observed in equivalent shares on traditional trading venues, while simultaneously suffering from significantly lower market liquidity.

Structural Challenges and Systemic Risks

The core difficulties facing the market extend beyond the simple reality that blockchain-based trading venues are currently small in scale. For tokenization to successfully deliver its promised savings in operational costs and settlement times, it requires a critical mass of active issuers, diverse investors, robust trading venues, and compatible settlement assets. Today, however, the global market remains heavily fragmented, split awkwardly across private platforms, public blockchains, isolated custodians, and legacy settlement tools that frequently fail to communicate or work together seamlessly.

The IMF report highlights that tokenization possesses the genuine potential to eliminate portions of the manual labor financial firms currently undertake to reconcile divergent records. It could theoretically automate routine tasks such as dividend distributions and dramatically accelerate the transfer of collateral between counterparties. At the same time, the institution issued a stern warning: automated margin calls, automated liquidations, rapid collateral movements between disparate platforms, and continuous 24-hour trading could inadvertently combine to make sudden market shocks significantly harder to contain.

At present, these systemic risks remain relatively small simply because the overall size of the tokenized equity market is still constrained, the IMF noted. Nevertheless, the report argues that foundational elements—including clear legal rules governing digital ownership, comprehensive safeguards for liquidity, reliable links between disparate financial systems, and modern settlement arrangements—must be intentionally developed and implemented before the market scales to a much larger size.