- Key insight: Tokenization improves how markets operate by making settlements faster, increasing their mobility, boosting transparency and expanding access.
- What's at stake: According to the IMF, tokenization risks amplifying financial instability.
- Forward look: Over time, it will change how assets are held and moved, even within compliant frameworks.
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To counter these risks, the note emphasizes the importance of international coordination, clear policy frameworks, public trust and safe settlement assets. In the opinion of the IMF, however, safe settlement assets doesn't mean bitcoin or USDT. It means wholesale central bank digital currencies. In this framework, stability comes from keeping assets within institutions that dictate how and when they move. They decide when a trade is final, who can access the asset and whether it can move at all. The IMF's position is not new. It echoes a long-standing preference across traditional finance: Embrace the efficiency of blockchain infrastructure while containing the elements that redistribute control.
That structure still defines how markets function today. Custodians hold assets, and clearinghouses determine when transactions are final. Settlement cycles create time to intervene. Control sits inside those layers, and asset movement depends on them.
Tokenization does not just accelerate settlement;
Technologists once described bitcoin as a Trojan horse, as something that enters the financial system in a familiar form while carrying a different model of control underneath. That shift has been slower than expected. Over the past decade, digital asset markets have largely embraced traditional finance, not moved away from it. Exchanges have aligned with know-your-customer and anti-money-laundering requirements, while regulated institutions have consolidated custody. Institutional participation has taken place through familiar structures, such as exchange-traded funds, which were designed to fit within the existing system. Tokenization risks falling into this same trap. Some could argue that instead of disrupting the market, it is being shaped by those same regulatory and institutional pressures. But even within these limits, tokenization has still introduced game-changing characteristics to the market. Assets can move more freely across platforms. They can be programmed. Ownership is now less dependent on intermediaries. The shift in control is not immediate or complete, but it is already taking form.
What makes tokenization distinct from earlier cycles is that it introduces a workable middle ground. Whitelisted ecosystems allow issuers to meet regulatory requirements while still enabling investors to self-custody assets and trade peer-to-peer within defined parameters.
Tokenization is being adopted from within the system, not alongside it. It's improving how markets operate by making settlement faster, increasing their mobility, boosting transparency and expanding access without forcing a structural break.
The move is the first cog in a wider plan to make tokenized deposits more interoperable across borders and, eventually, among the bank's clients.
That shows up in a few ways. Ownership can be split more easily, opening access to a wider group of investors. Markets don't really close anymore, which removes some of the time-based barriers that used to shape participation. Stablecoins make global settlement more practical, and assets aren't as tied to a single platform as they once were.
But the features driving that adoption are the ones that redistribute control. Assets can be held directly within compliant environments, transferred between approved participants without waiting on a clearing process, and moved across platforms without being locked into a single venue. Control shifts closer to the holder of the asset.
That is the shift the IMF is reacting to, even if it does not frame it that way. Speed is the mechanism. Control is the driver of change.
In traditional markets, stress builds inside the same institutions that control custody and settlement. Delays can slow how that stress appears, but they also allow imbalances to build behind the system. In tokenized markets, adjustments happen continuously. Pressure is less likely to accumulate out of view because movement is not gated in the same way. Risk remains, but it is less concentrated.
The IMF's response is to recreate those control points at the infrastructure level. That follows a familiar pattern of adopting what improves efficiency and containing what shifts control. Tokenization makes that separation hard to maintain. Real-time settlement, direct ownership and asset portability are not optional features. They define how the system works. Limiting them means limiting the system itself.
Tokenization enters the system as an efficiency upgrade. That is why it is being adopted. Over time, it will change how assets are held and moved, even within compliant frameworks. The system adopts it because it makes markets more efficient. The shift in control follows.
Tokenization is more an evolution of capital markets than a revolution. But like bitcoin, it introduces structural changes that are difficult to contain once adopted. A market built on those terms doesn't just move faster. It operates with a different understanding of who controls assets and how they move.
