IMF Says Tokenization Can Change Global Financial Architecture

The International Monetary Fund said tokenization can change the world’s financial architecture, with policy choices determining whether the shift strengthens or fragments the financial system.

Tobias Adrian, the IMF’s Financial Counsellor and Director of the Monetary and Capital Markets Department, published the July 2 blog Tokenization Can Change the World’s Financial Architecture. The piece builds on the IMF Note Tokenized Finance, which frames tokenization as a structural change in financial-market infrastructure.

Tokenization moves financial assets and liabilities onto shared programmable ledgers. That can let execution, clearing and settlement happen at the same time, replacing sequential workflows that still rely on centralized databases, intermediaries and reconciliation cycles.

The IMF also flagged the trade-off. Faster settlement removes frictions, but it can also remove buffers that give banks, market operators and supervisors time to intervene during stress. Liquidity demands, collateral calls and smart-contract execution can move faster than traditional reporting and risk-control systems.

Settlement Assets Become A Policy Question

The IMF identified three main forms of digital settlement money: tokenized bank deposits, stablecoins and tokenized central bank reserves.

Tokenized bank deposits represent existing commercial bank liabilities on programmable ledgers. Stablecoins offer global reach and programmability, but their par value depends on reserve quality, market liquidity and issuer resilience. Tokenized central bank reserves reduce settlement-asset credit risk, but they would require central banks to govern or operate new programmable infrastructure.

That split matters for banks, payment firms and tokenized-asset platforms. A financial system built around 24/7 programmable settlement would need real-time liquidity management, clear redemption rules, code governance and legal finality for token transfers.

The IMF’s warning lands as tokenized public-market products keep expanding. Ondo recently added 24/7 minting and redemption for selected tokenized U.S. stocks and ETFs, while BNB Chain tokenized-stock volume topped $5 billion as Ondo and xStocks activity increased.

Oversight Moves From Institutions To Infrastructure

The IMF said tokenization does not eliminate banks. It changes how banks manage funding, liquidity and risk.

Tokenized deposits can unify payments, client settlement and treasury functions. Tokenized lending can embed interest accrual, collateral triggers and enforcement rules into smart contracts. Tokenized securities can combine issuance, trading, settlement, custody and compliance into integrated workflows.

The same structure can concentrate operational risk inside fewer platforms, ledgers, bridges, custodians and smart contracts. Market infrastructure, cybersecurity, interoperability and crisis management become central parts of tokenized finance rather than back-office details.

Legal clarity remains one of the largest requirements. Market participants need to know whether tokenized records represent definitive ownership, whether settlement finality is recognized in law, which jurisdiction applies, and who is responsible if code, custody or transfer controls fail.

Emerging Markets Face Faster Capital Flows

The IMF said tokenization could help emerging and developing economies through faster cross-border payments, broader market access and more efficient settlement. It also warned that tokenized assets and money can move across borders almost instantly, increasing risks around volatile capital flows, currency substitution and monetary sovereignty.

Stablecoin growth remains part of that policy challenge. Global issuers, tokenized bank deposits and central bank-linked settlement assets may compete across the same payment and liquidity rails, with different legal protections and risk models.

Crypto platforms are already moving in that direction. Binance said its stock-trading product crossed $1 billion in user holdings within 30 days, while Coinbase announced 1:1-backed tokenized U.S. stocks with onchain redemption and automatic dividends.