The International Monetary Fund emphasised both the advantages and risks of the tokenisation market.
According to Cointelegraph on the 28th local time, the IMF warned that tokenisation makes financial transactions faster and cheaper but could intensify volatility and trigger flash crashes.
The IMF said tokenisation reduces intermediaries in existing financial systems, lowering costs and enabling instant settlement, but automated trading carries a high risk of sparking market drops. It noted that smart contracts could act like dominoes, turning local issues into system-wide shocks.
The IMF also expressed concern that limited interoperability among tokenisation platforms could fragment markets and weaken liquidity. It added that governments have historically intervened in financial innovation and predicted a growing regulatory role in tokenised markets.
The IMF cited the 1944 Bretton Woods Agreement, in which governments redesigned the global monetary system, and said the tokenisation market is also likely to grow under regulation.
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Chikyuu Hwang
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