IMF Warns Tokenization Will Shift Financial Power From Banks to Code

The International Monetary Fund (IMF) just warned that tokenization, the tech behind the crypto boom, could rip risk out of banks and hand it to lines of code that no regulator controls.

The timing is loaded. Wall Street giants like BlackRock are racing to move trillions on-chain. The IMF says that same plumbing could crack under stress.

Tokenization Turns Delays Into Split-Second Risk

Today, buying or moving assets runs through banks and middlemen, with small delays built in. Those delays are annoying, but they act as safety brakes when something breaks.

Tokenization rips those steps out. Deals settle instantly on shared ledgers, run by self-executing code called smart contracts, with no human in the loop.

That speed cuts costs, and it removes the brakes. When trades fire automatically, a glitch or a run can spread before anyone reacts. The IMF made the same point in earlier work on risks to tokenized finance.

Its sharpest warning is about who ends up holding the danger. Not banks, but the platforms and code that run the trades.

“Effective oversight must therefore extend beyond institutions to the code itself,” read an excerpt in the blog, citing Tobias.

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The IMF even floated a startling idea. Some smart contracts could grow so central they become too important to fail. That is the tag that forced the 2008 bank bailouts.

Courts still have not settled who owns tokenized assets when a deal lives only in code.

Who Wins, Who Loses

The prize is huge. BlackRock’s tokenized fund, BUIDL, already holds about $2.4 billion, and Ondo runs more than $1.4 billion in tokenized assets.

The real action is in stablecoins. More than $300 billion now sits in them, dwarfing the roughly $32 billion in other tokenized assets, per rwa.xyz.

Even the safe ones wobble. In March 2023, USD Coin (USDC) briefly fell to 87 cents. The cause was $3.3 billion stuck at a collapsed bank.

Tether’s USDT leads the sector near $186 billion, per DefiLlama. However, European rules pushed it off major exchanges, lifting Circle’s USDC toward $73 billion. That European USDT crackdown shows how fast the map redraws.

Not everyone is worried. BlackRock chief Larry Fink calls this the start of an era where every asset gets tokenized. He wants the whole financial system on one shared blockchain.

That is the split. Industry sees cheaper, faster, open markets. The IMF sees the same speed turning a local failure into a global one before regulators can blink.

Tokenization is more than a technology upgrade. It can reshape how the financial system operates. New IMF analysis explains what changes and why policy choices will matter: https://t.co/niSfVsSwgf pic.twitter.com/68nNulSY3w

— IMF (@IMFNews) July 5, 2026

For now, real trading stays thin, with much of the tokenized asset market barely moving week to week. The next few years of rules, not the code, will decide who is right.