IMF Warns Tokenized Finance Risks Amplifying Market Crises Ahead

Moving Wall Street’s trading infrastructure onto blockchain-based systems could accelerate financial crises beyond regulators’ ability to respond, even as the technology promises to cut costs and eliminate settlement delays, the International Monetary Fund says.

Tokenization — the act of representing assets like stocks, bonds and cash as digital tokens on shared ledgers — is a structural overhaul of financial architecture rather than a marginal efficiency gain, the IMF’s Tobias Adrian wrote in a report published on Thursday.

Banks, clearing houses and asset managers including BlackRock Inc. and JPMorgan Chase & Co. are already running live pilots to test a technology ...