The International Monetary Fund (IMF) says tokenization could fundamentally change the way financial markets operate, marking one of the strongest confirmations yet from a global policymaker that blockchain-based infrastructure is entering the financial mainstream.

On the blog published On Thursday, Tobias Adrian, financial adviser to the IMF and director of the Department of Foreign Exchange and Capital Markets, said tokenization is more than a niche cryptocurrency innovation. By placing assets, settlements and records on a common ledger, tokenization could compress today’s multi-day settlement process into near-instant transactions.

Adrian also warned that tokenization shifts risk from conventional financial intermediaries to the underlying infrastructure, including clever contracts, distributed ledgers and service providers. Without common standards and coordinated regulation, tokenized financial markets could fragment into incompatible platforms, creating recent sources of systemic risk.

Source: IMF

The report comes as financial institutions accelerate efforts to integrate tokenization into conventional markets. The clearinghouse, owned by JPMorgan Chase, Bank of America and Barclays, reportedly plans to launch a tokenized deposit network in early 2027 to keep deposits in the regulated banking system while enabling faster, programmable payments.

The IMF’s assessment is consistent with the latest one tests with PwC, which said tokenization could solve long-standing shortcomings in conventional finance, including payment settlement and the transfer of asset ownership. This also follows a May report from Moody’s showing that conventional financial institutions are actively preparing to move towards tokenized finance.

Related: Tokenization increases the efficiency of finance, but introduces risk: IMF

Regulators are racing to define tokenized finance

The IMF report highlighted the growing role of regulators in shaping tokenized finance. Adrian said policymakers have a narrow window to determine how tokenized markets evolve, arguing that decisions about settlement assets, governance, interoperability and the role of central banks will aid determine whether tokenization increases the efficiency of the financial system or introduces recent systemic risks.

In the United States, the Securities and Exchange Commission has taken steps to clarify how existing securities laws apply to tokenized assets, rather than creating a separate regulatory framework.

Source: Cointelegraph

The agency also signaled it was considering an “innovation exception” that could allow market participants to test blockchain-based trading platforms for tokenized securities until a long-term regulatory framework is developed.

Warehouse: Can Robinhood or Kraken tokenized stocks ever become truly decentralized?