The International Monetary Fund has set out how tokenisation could transform the world’s financial architecture, arguing that policy choices made now will determine whether the shift strengthens or fragments global markets.
The views come from a new IMF blog by Tobias Adrian, who says tokenisation is “a lot more” than a technological upgrade and represents a structural change in how financial assets and liabilities move through the system.
In the blog, Adrian writes that when assets migrate to shared digital ledgers, “processes that today occur sequentially — execution, clearing, settlement — can now happen simultaneously, governed by software rather than institutional processes.” He says this removes long‑standing frictions but also eliminates buffers that currently provide time for intervention during stress or errors.
The analysis argues that embedding ownership and transfer directly within tokenised assets allows smart contracts to execute trades, transfer title and move payments at once. But this also means liquidity demands materialise instantly, collateral calls can be automated, and failures may propagate faster. “Risk that once were borne by the balance sheet of individual institutions… become increasingly concentrated in the platforms and code that govern these transactions,” Adrian writes.
The blog outlines three emerging forms of digital money in a tokenised environment: tokenised bank deposits, stablecoins, and tokenised central bank reserves. Tokenised deposits inherit existing regulatory frameworks but rely on real‑time liquidity backstops. Stablecoins offer global reach but depend on maintaining par convertibility. Tokenised central bank reserves remove credit risk but require central banks to operate or govern new programmable infrastructures — a “consequential design choice” for public‑private roles.
Banks, Adrian says, “will change, not disappear.” Tokenised deposits unify payments, client settlement and treasury functions, while tokenised lending embeds rules directly in smart contracts, enabling continuous monitoring and timely enforcement. Capital markets face similar compression, with issuance, trading, settlement, custody and compliance converging into integrated workflows.
The IMF notes that permissioned ledgers concentrate activity on fewer platforms, improving efficiency but increasing the importance of operational resilience, cybersecurity and crisis management. Interoperability is critical: fragmented platforms could trap liquidity and reintroduce risk. Instantaneous, 24/7 settlement challenges central banks’ business‑day practices and may require liquidity backstops that operate “at machine speed.”
As financial logic moves into code, Adrian says oversight must extend to smart contracts themselves, which could become “too important to fail.” Legal clarity on ownership, settlement finality and jurisdictional treatment is equally essential to prevent tokenisation from remaining fragmented and peripheral.
For emerging and developing economies, tokenisation could improve cross‑border payments and market access, but also accelerate capital flows and increase risks to monetary sovereignty. The blog says strong domestic frameworks and international coordination are essential.
Adrian concludes that the future of tokenised finance will be shaped by decisions on public and private money, interoperability, legal foundations, code governance and liquidity backstops. The best outcome, he writes, would be a system that provides “risk‑free settlement assets and internationally aligned oversight, while encouraging and enabling desirable features such as interoperability.”
