Update
IMF Finds Tokenized Stocks Still Volatile and Illiquid
The International Monetary Fund (IMF) has released a study examining the five most actively traded tokenized U.S. equities, including Tesla (TSLA), Nvidia (NVDA), and Alphabet (GOOG). The study reveals that more than half of trading takes place outside regular U.S. market hours, with about 80% of trades for less than one share. The IMF notes that while tokenized stocks offer round-the-clock trading and lower entry points, they are still less liquid and more volatile than traditional equities. The report highlights the need for improved legal rules, settlement systems, and liquidity to support the growth of the tokenized real-world asset (RWA) market, which is estimated to be around $65 billion as of July 31. The IMF suggests that tokenization could replace some manual work firms do to reconcile records, automate tasks such as dividend payments, and speed up collateral transfers, but warns that automated margin calls and liquidations could make market shocks harder to contain. The study underscores the challenges of scaling tokenization, particularly in terms of integration and coordination between different platforms and systems.