The IMF Says Tokenised Stock Markets Are Thinner and More Volatile Than the Real Ones

The International Monetary Fund has warned that tokenised markets could magnify rather than dampen financial risk, Cointelegraph reported. Its finding on tokenised equities, shares represented as transferable tokens on a blockchain, is that these markets are less liquid and more volatile than the conventional markets for the same securities, even while investor appetite for 24/7 access keeps growing.

That is a narrower and more useful claim than the usual argument about tokenisation. It is not a point about custody or legal wrappers. It is a point about the order book. A token that tracks Apple is only as good as the depth standing behind it, and depth is what the IMF says is missing relative to the underlying listing.

Why thinness and volatility travel together

The two findings are the same finding seen from different angles. Volatility in a venue is largely a function of how much size it takes to move the price. On a primary exchange, a mega-cap share absorbs very large orders with minimal price impact because market makers compete to quote it. On a tokenised venue, the same name may have a fraction of that depth, so an order that would barely register on the listing venue moves the token several percent.

The round-the-clock trading that drives demand for these products sharpens the problem rather than solving it. When the underlying share market is shut, a market maker quoting the token cannot hedge the position it takes on, so it either widens its spread or stops quoting. The hours that are most attractive to the user are the hours in which the book is thinnest.

A risk channel, not a verdict

The IMF frames this as a potential amplifier of financial stress, according to the Cointelegraph account. The mechanism is straightforward enough to state: if tokenised representations of securities become collateral inside crypto markets, a price dislocation in a thin token can trigger liquidations that have nothing to do with the value of the underlying company. Stress then moves from the token layer outward rather than from the company inward.

None of this is an argument that the products do not work. It is an argument about where they work and at what size, and it arrives in a month when the supply of them has expanded sharply.

Timing

The warning lands the same week that Securitize launched tokenised shares in twelve US companies on Solana, each backed one for one by real stock, and the same week Standard Chartered said it plans institutional custody for tokenised assets in Singapore. The institutional plumbing is being built faster than the liquidity that would make the IMF's objection moot.

The test of the IMF's claim is measurable and will be measured. Spreads, depth at the touch and the gap between a token's price and the underlying share's last trade are all observable. If the new issuance brings serious market makers with it, those numbers narrow. If it does not, the Fund's finding will hold at a larger notional than it describes today.