
The global financial institution found tokenized equity markets less liquid and more volatile than traditional markets, despite growing demand for 24/7 trading.
Tokenization could reshape financial markets by making trading and settlement more efficient, but& legal uncertainty and risks to financial stability could hinder wider adoption, according to the International Monetary Fund (IMF).
In a Thursday& analysis, the IMF said tokenized financial markets are growing rapidly but& remain small compared with traditional markets, with poor interoperability and a lack of widely accepted settlement assets among the key obstacles to expansion.
The gap between tokenizationβs potential and its current scale is evident in trading activity.& Tokenized repurchase agreements, or repos,& dominate tokenized trading activity, averaging $300 billion to $350 billion in daily transaction volume, compared with roughly $13 trillion traded daily in the broader US repo market.
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