IMF: Tokenization's Growth Depends on Regulatory Framework
Tokenization can lower transaction costs and enhance efficiency in financial markets, but its growth relies on regulatory clarity, adequate liquidity, and proper safeguards, according to the International Monetary Fund. In its October Global Financial Stability Report, the IMF emphasized that the future of tokenization is influenced more by supportive policies than by the technology itself. The report noted that over half of stock-token trades occurred outside regular equity market hours, with around 80% executed in sizes of less than one share, highlighting a demand for 24-hour trading and fractional investing. However, the tokenized market currently faces liquidity challenges and exhibits greater volatility compared to traditional markets. The IMF pointed out that trading is fragmented across various platforms, leading to price discrepancies, and cautioned that further market growth could result in fire sales and liquidity stress affecting the broader financial system.
-- Price
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