The International Monetary Fund's latest Global Financial Stability Report indicates that tokenized stocks have generated genuine trading interest, yet the assets remain significantly more volatile and less liquid than their traditional counterparts. The findings raise questions about whether these blockchain-based instruments can sustain a viable market structure as major financial institutions expand their offerings.
According to the IMF, more than half of all trading in tokenized equities occurs outside regular U.S. market hours. The study, which covered 365 days of activity across 11 trading venues, found that approximately 80% of trades involved less than one full share. This pattern suggests strong demand from retail investors seeking fractional ownership of publicly traded companies. The analysis focused on the five most liquid tokenized U.S. equities, including tokens tracking Tesla, Nvidia, and the S&P 500.
The data indicate that onchain prices convey meaningful information to traditional markets. When U.S. markets reopened, traditional shares absorbed between 87% and 99% of the overnight price moves recorded by their tokenized versions, the IMF reported. However, the report highlights significant drawbacks in market quality. Tokenized equities exhibited volatility roughly 1.5 times higher than the underlying stocks. Liquidity was also far lower, particularly on decentralized exchanges where prices deviated more sharply from traditional market values.
The current market for tokenized stocks is small and concentrated. The IMF valued the sector at approximately $2.3 billion. Ondo Finance and Backed Finance's xStocks platform account for more than 70% of this total. Both entities issue synthetic tokens that provide price exposure without granting direct ownership of the underlying shares.
Given the early stage of this market, the IMF advised that its findings be interpreted with caution. Systemic risks are currently limited, but the fund urged regulators to consider implementing circuit breakers for 24/7 trading and to monitor connections to traditional markets more closely. Earlier in the year, the IMF warned that tokenized finance and stablecoins have the potential to amplify financial crises.
The report arrives as several major U.S. financial players accelerate their entry into tokenization. The NYSE plans to access crypto investors through Blockchain.com, while its parent company ICE is collaborating with OKX on 24/7 tokenized stock trading under the SEC's new innovation exemption. Securitize has recently brought tokenized shares of Nvidia, Apple, and Amazon to the Solana network, with plans to expand to other blockchain platforms. Additionally, Cboe has signed a deal with S&P for tokenized options, and Coinbase launched tokenized stocks for non-U.S. users on Base in August.