The International Monetary Fund has found that tokenized stocks experienced approximately 1.5 times the volatility of traditional shares, even as more than half of transactions occurred outside regular U.S. trading hours and 80% involved less than one share.
Summary
- IMF research found over half of tokenized stock trading occurred outside regular United States market hours.
- 80% of examined tokenized equity trades involved quantities smaller than one conventional share, IMF researchers found.
- Tokenized equities showed approximately 1.5 times the volatility of equivalent stocks traded through traditional exchanges.
- The IMF estimated tokenized real world assets at $65 billion, including $2.3 billion in equities.
- Researchers recommended clearer ownership rules, compatible settlement systems, stronger liquidity safeguards, and improved market oversight measures.
The IMF’s October 8 study, titled Scaling Tokenization: New Efficiencies, New Vulnerabilities, examined how blockchain-based securities are being traded and the risks associated with their growing use. Researchers found demand for continuous trading and fractional ownership, but warned that tokenized stock markets remain less liquid, more fragmented and more exposed to sharp price movements than conventional exchanges.
The study forms Chapter 3 of the October 2026 Global Financial Stability Report and draws on trading data from centralized and decentralized platforms.
IMF finds demand for tokenized stocks outside market hours
The IMF examined five actively traded tokenized U.S. equity products, covering Tesla, Nvidia, Alphabet, the S&P 500 and Nasdaq-linked exposure.
Its sample included products issued by Ondo Finance and xStocks across 11 trading venues.
Researchers studied approximately $345 million in tokenized equity value, representing roughly 15% of the total tokenized stock market measured in the report.
The analysis covered 365 trading days and more than 2 million observations of trading prices and volume recorded at five-minute intervals.
According to the IMF, more than 50% of tokenized equity trading occurred outside regular U.S. stock market hours.
The study found demand from investors operating in different time zones and from traders seeking to react to developments when conventional exchanges were closed.
On U.S. stock exchanges, regular trading generally runs from 9:30 a.m. to 4 p.m. Eastern Time on business days.
Blockchain-based stock products can support transactions during evenings, overnight periods and weekends, depending on the trading platform.
The IMF’s findings indicate that investors are already using those extended trading opportunities.
Smaller transactions represented another important feature of the market.
Approximately 80% of tokenized equity trades involved quantities smaller than one conventional share.
Researchers interpreted the pattern as evidence of demand for fractional ownership, particularly among individual investors.
Fractional trading allows investors to purchase exposure to part of a share without paying the full price of the underlying stock.
The report found that smaller retail-oriented transactions dominated the sample, while large institutional trades remained relatively limited.
However, the IMF cautioned that its findings concern an early-stage market, meaning trading patterns could change as additional participants enter.
Tokenized stocks show higher volatility and weaker liquidity
While the trading figures demonstrated demand for tokenized shares, the IMF identified several problems affecting market quality.
Its research found that tokenized equities experienced approximately 1.5 times the realized volatility of their traditional counterparts.
Realized volatility measures the extent of actual price movements over a specified period.
The IMF attributed part of the difference to limited trading liquidity and the availability of continuous trading during periods when fewer buyers and sellers participate.
According to the study, decentralized exchanges recorded the highest volatility, followed by centralized cryptocurrency exchanges and traditional stock markets.
Liquidity presented another concern.
The IMF assessed how much prices moved relative to the amount traded, using a measure that compares price changes with transaction volume.
Conventional equity markets showed the strongest liquidity, while decentralized exchanges were the least liquid.
Researchers found that trades could move prices more sharply on tokenized platforms because fewer market participants were available to absorb orders.
At the same time, tokenized stock prices generally followed their underlying shares when conventional markets were open.
The IMF found that higher-volume platforms maintained closer price alignment with traditional exchanges.
Decentralized venues recorded larger and more frequent pricing differences, consistent with their weaker liquidity.
Another finding concerned the relationship between overnight blockchain trading and the next U.S. stock market session.
Using the five actively traded products, researchers examined how overnight tokenized stock returns compared with the first five minutes of regular U.S. trading.
The study estimated that between 87% and 99% of overnight price information was reflected in traditional market prices during those opening minutes.
The IMF interpreted the results as preliminary evidence that tokenized markets can contain information relevant to conventional stock prices.
However, researchers warned that the small market size and limited trading sample require caution when interpreting the results.
Tokenized asset market reaches $65 billion as stocks remain small
The IMF estimated that the public tokenized real-world asset market had reached approximately $65 billion as of July 2026, excluding stablecoins and repurchase agreements.
Tokenized equities accounted for approximately $2.3 billion.
The report found that tokenized credit represented $30.4 billion, while money market funds accounted for another $17.5 billion.
Together, fixed-income-related products represented approximately $48 billion of the measured market.
The study identified Ondo Finance and Backed Finance as leading issuers of tokenized equities.
According to the IMF, the two platforms accounted for more than 70% of the estimated market value of tokenized stocks.
Many of their products targeted investors living outside the United States.
The estimated $2.3 billion tokenized equity market remained small compared with conventional global equities, which were valued at nearly $160 trillion in 2025, according to SIFMA figures referenced in the supplied market data.
The IMF noted that tokenized financial products serve different types of investors.
Individual traders dominate tokenized equities, while institutional participants account for much of the activity in tokenized bonds, money market funds and repurchase agreements.
For financial institutions, the study identified collateral management as a potentially useful application of blockchain technology.
Tokenized securities can be transferred through programmable systems, potentially reducing the need for separate institutions to reconcile records.
The IMF said automated processes could support dividend distribution, collateral transfers, settlement and reporting.
However, realizing those efficiencies depends on compatible platforms, sufficient market participation and reliable settlement arrangements.
IMF calls for clearer rules as tokenized trading expands
The IMF warned that tokenized markets operate across different blockchains, trading venues, custodians and settlement systems that do not always communicate effectively.
Researchers identified four major requirements for further development: legal certainty, regulatory clarity, compatibility between networks and access to suitable settlement assets.
The report said investors need clear legal rights attached to tokenized securities.
A blockchain token may represent direct ownership of a share, an entitlement held through a financial intermediary or a product that tracks a stock’s price.
The IMF stressed that these arrangements can create different rights and obligations for investors.
The organization recommended consistent regulation based on the risks and activities involved, regardless of the technology used.
For trading platforms, the study called for liquidity protections, monitoring of interconnected markets and safeguards against disorderly trading.
Automated margin calls and liquidations were among the risks examined.
The IMF warned that rapid collateral transfers across connected platforms could accelerate selling pressure during a financial shock.
It recommended evaluating circuit breakers and other controls designed to limit disorderly market activity.
Despite those concerns, the organization assessed current systemic risks from tokenization as limited because the market remains relatively small.
The IMF did not announce new binding regulations or a deadline for jurisdictions to implement its recommendations.
Meanwhile, financial companies have continued introducing blockchain-based equity products.
On August 12, Bullish announced the start of trading in tokenized versions of its own publicly listed shares.
The Gibraltar-regulated platform said the tokens represented issuer-sponsored equity with ownership recorded through the share registry.
Bullish stated that the arrangement gave holders direct shareholder rights, with trades settling against a U.S. dollar stablecoin.
The company identified Wintermute as a liquidity provider and named Qube Research & Technologies, Annamite Capital, Fasanara Digital and Star Beta Technologies among the institutional participants.
Its exchange supports continuous trading and near-instant settlement, according to the company.
In October, Securitize expanded access to tokenized U.S. stocks through Solana.
The company introduced products linked to 12 publicly traded businesses, including Apple, Nvidia and Tesla.
The launch of tokenized Apple shares on Solana involved securities entitlements backed by underlying shares held through a regulated intermediary.
Securitize said token holders could receive applicable economic benefits, although investors would not automatically appear as registered shareholders of the underlying companies.
Earlier, the U.S. Securities and Exchange Commission approved a tokenized securities pilot involving Nasdaq, allowing eligible participants to trade specified shares and exchange-traded funds in tokenized form under the approved framework.
The pilot includes securities from the Russell 1000 and certain index-linked exchange-traded funds, with requirements designed to preserve equivalent shareholder rights.
Nasdaq subsequently agreed to invest $100 million in Kraken parent Payward as the companies expanded their work on blockchain-based stock trading.
Under the Nasdaq and Payward agreement, the companies expect Nasdaq Equity Tokens to become available in the second quarter of 2027, subject to the relevant development and regulatory conditions.
Nasdaq said the partnership would extend its market surveillance technology across participating cryptocurrency, equity and derivatives platforms.
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