IMF Warns Tokenized Finance Could Reshape Global Financial System
By CU Today Staff —
WASHINGTON— The rapid growth of tokenized finance could reshape the global financial system, creating opportunities for greater efficiency while introducing new risks that regulators must address, according to an analysis by International Monetary Fund official Tobias Adrian, as reported by Scottish Financial News.
Writing in an IMF blog, Adrian argued tokenization should be viewed as more than a faster way to process payments or settle securities transactions. Instead, he said moving financial assets and liabilities onto shared digital ledgers could fundamentally change how markets function by allowing trading, clearing and settlement to occur simultaneously through software rather than traditional financial institutions.
Adrian also said policymakers must resolve questions surrounding the future roles of commercial bank deposits, stablecoins and central bank money, as well as the legal treatment of tokenized assets and the resilience of digital infrastructure. While emerging markets could benefit from improved access to capital and less expensive cross-border payments, he warned that poorly designed frameworks could increase capital-flow volatility and weaken monetary sovereignty, making today's policy decisions critical to the future stability of the global financial system.
Originally reported by CU Today.