IMF: Tokenized markets are tiny, retail-driven and fragmented, and stablecoins may be the weak link

Tokenized real-world assets reached around $65 billion in July, the IMF says.

Despite the impressive amount, the tokenized RWA market is still small and dominated by retail traders. The IMF also stated that stablecoin-based settlement is a source of fresh risk for regulators.

How large is the tokenized RWA market?

Chapter 3 of the International Monetary Fund’s (IMF) October Global Financial Stability Report, titled “The Expansion of Tokenization: New Efficiencies and Vulnerabilities” was presented at a Bank of Korea annex building on Thursday.

The chapter is one of several sections that the IMF is rolling out ahead of the IMF-World Bank annual meetings that open in Bangkok on October 12.

Not including repurchase agreements, stablecoins and private deals, and public tokenized real-world assets came to roughly $65 billion as of July. Fixed-income instruments make up the bulk of that figure at about $48 billion, split between $30.4 billion in credit products and roughly $17.5 billion in money-market funds. Tokenized equities trail far behind at around $2.3.

According to the IMF’s latest 30-day measurement, tokenized repurchase agreements averaged around $303 billion in daily volume. However, that figure is dwarfed by the approximately $13 trillion traded each day in conventional U.S. repo.

The IMF studied five of the most liquid products in order to see how tokenized equities actually behave. It studied products issued by Ondo Finance and xStocks and tracked the S&P 500, the Nasdaq 100, Tesla, Google and NVIDIA. The sample spanned 11 venues and 365 trading days, with a combined market value near $345 million.

Over half of trades took place outside normal U.S. market hours, and about 80% were for less than one share. The IMF concluded that 24/7 access and fractional trading are what define how these tokens are used today, with small retail investors playing a big role.

Tokenized products were also about 1.5 times more volatile than the same stocks in traditional markets, and decentralized exchanges had the weakest liquidity of any venue studied.

Why does the IMF want trades settled in central bank money?

The IMF has warned that settling securities with private deposit tokens or stablecoins, instead of central bank money, would pile contagion and concentration risk. Meanwhile, the issuer already carries the credit and liquidity risk.

Tobias Adrian made a related case in an April report and the IMF’s annual report in September from the IMF, arguing that stablecoins can see mass withdrawals when confidence slips.

Just days before the chapter was released, a joint venture between OKX and NYSE owner Intercontinental Exchange notified the SEC that it plans to launch a 24/7 tokenized stock venue under the agency’s new Innovation Exemption. It will list more than 60 stocks, from Nvidia and Tesla to SpaceX, and each token will trade against a stablecoin: USDC, USDG, or Tether’s USDT.

The analysis also applies to South Korea, which plans to launch a token-securities framework in February. It will start with institutional investors, then open to retail investors, and eventually move to on-chain settlement using tools such as stablecoins.

The report recommends safety measures like technology-neutral supervision, regulatory sandboxes, safe settlement assets, circuit breakers, and liquidity buffers.

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