03 Jul 2026 09:08 UTC - by Omkar Godbole
Tokenization could make finance faster and cheaper but also more vulnerable to sudden shocks.
➤ The IMF warns that while tokenization can make finance faster and cheaper by enabling instant trades and payments via smart contracts, it also removes crucial time buffers that mitigate the spread of financial shocks.
➤ Without updated regulations, tokenization could amplify systemic risks, concentration, cybersecurity threats, and volatile cross-border flows, particularly in emerging economies.
➤ Key concerns include the lack of regulatory clarity on ownership, settlement finality, and applicable jurisdictions, as well as the potential for rapid propagation of failures and concentration of risk on fewer platforms.
