The International Monetary Fund has cautioned that tokenized markets, despite rapid growth and around-the-clock availability, still lack the dependable liquidity of their conventional counterparts. Tokenization, as the Fund uses the term, means representing assets — or claims on them — as digital tokens recorded on shared ledgers. In its October 2026 analysis of tokenized finance, the Fund estimated daily trading volume in tokenized assets — spanning credit instruments, money market funds and equities — at roughly $65 billion.

That number measures trading activity, not the total value of tokenized real-world assets outstanding, the Fund noted. The IMF also put daily tokenized repo volume at approximately $300 billion to $350 billion, a fraction of the roughly $13 trillion that changes hands daily in the conventional U.S. repo market. Repos dominate today's tokenized activity because they are short-term secured funding instruments used heavily by financial institutions.

The comparison captures both the promise and the limits ofized finance: even its largest segment remains small next to the conventional market it aims to modernise. The warning also reaches past crypto-native products: money market funds, credit instruments and repo are the cash-management and funding tools of mainstream finance, and the IMF's own figures show tokenized versions of them are where tokenized activity is concentrated. The IMF's concern is not that tokenization lacks speed — it is that fast issuance, trading and settlement do not automatically create a dependable exit when an investor needs cash.

Transferable, Saleable and Redeemable Are Not the Same Thing

“Liquidity” is often discussed as though it were a single feature. For tokenized assets, the IMF's analysis suggests it is more useful to separate three questions that can produce very different answers.

A tokenized fund may be transferable around the clock, while direct redemptions are available only on scheduled dealing days or only to authorised investors. In that case, a token can move quickly without giving every holder a quick route to cash.

The same principle applies to tokenized equities. Some products give the holder a contractual or beneficial interest rather than direct registration as the shareholder. The exact claim depends on the issuer's documents, the custody arrangement and the jurisdiction. As explained in Coindoo's guide to tokenized-stock ownership, the legal right behind the token can matter more than the balance displayed in a wallet.

Fragmentation Can Turn One Asset Into Several Smaller Markets

According to the IMF, tokenized trading remains fragmented across platforms, networks and settlement arrangements. Rather than bringing every buyer and seller into one deeper market, separate systems can divide liquidity into smaller pools.

Consider two tokenized versions of a similar Treasury product. One may trade on a permissioned ledger between institutions, while another is available on a public chain with different wallets, stablecoins and compliance rules. The two may reference comparable assets, but their holders do not necessarily share the same pool of buyers.

A holder who cannot move directly between those venues may have to sell into a thinner market at a discount, wait for a redemption window, or rely on an intermediary to shift between systems. Interoperability matters, the Fund argues, because it determines whether buyers, assets and settlement money can connect — or remain isolated.

24/7 Trading Does Not Guarantee 24/7 Price Discovery

The IMF found that more than half of the tokenized-equity trading it examined took place outside traditional market hours, and about 80% of the analysed trades were for less than one share — evidence of demand for continuous access and fractional ownership.

Those features can be useful, but an overnight token price may form in a smaller market than the one that sets the main daytime price of the underlying share. Conventional equity venues operate on scheduled sessions, so the market that sets the official price is closed even as token venues continue to quote. The underlying exchange, its main market makers, and parts of the custody or settlement chain may be unavailable even while the token continues to trade.

Notably, the IMF found that overnight tokenized-equity returns were reflected in traditional equity prices shortly after markets opened, suggesting that both markets respond to similar information. That does not remove the liquidity problem: according to the Fund, tokenized markets remain relatively illiquid and more volatile than their traditional counterparts.

The practical distinction is this: continuous trading gives a holder more hours to find a price, but it does not ensure that enough buyers, cash and settlement capacity will be available at that price.

Faster Settlement Requires Stronger Safeguards

Traditional financial markets process trading, settlement, reconciliation and funding in separate stages. Those steps add cost and delay, but they also give firms time to net obligations, mobilise liquidity and resolve operational issues. Tokenized systems can compress those stages, which in normal conditions reduces settlement risk and operational friction.

The IMF is not arguing for slower markets. Its warning is that risk controls, liquidity facilities and operational safeguards need to keep pace when older buffers shrink. Stress can build quickly when thin markets, leverage, shared settlement assets and automated collateral or redemption rules interact at the same time.

As tokenized systems become more connected, the Fund cautions that familiar risks — fire sales, liquidity runs and contagion — could spread through new channels.

Five Questions to Ask Before Calling a Tokenized Product Liquid

The analysis points to a practical checklist for would-be investors:

• Who can buy the token? Check whether the secondary market has active, eligible buyers and whether market makers are consistently present.
• What legal right does it represent? Ownership, beneficial interest and a contractual claim can produce different outcomes in a dispute or insolvency.
• Is redemption offered? If so, identify who can use it, what assets or cash are delivered, and how long the process takes.
• What happens outside the underlying market's hours? A token may keep trading while the asset, issuer or settlement chain behind it operates on a narrower schedule.
• Which systems are required to complete the exit? The blockchain is only one part of the process; the issuer, custodian, broker, stablecoin or bank-money rail may be just as important.

The Real Test for Tokenization Is the Exit

The IMF's analysis acknowledges the appeal of faster transactions, continuous access and fractional ownership. Its warning is that those benefits do not by themselves answer the harder question of how an investor exits when many holders need liquidity at once.

The signals to follow, on the Fund's own account, are the same factors it dissects: interoperability between venues, redemption terms that are actually usable, and the enforceability of the legal claim behind the token.

Before treating a tokenized product as liquid, investors should identify who can buy it, who — if anyone — must redeem it, and what enforceable legal claim sits behind the token. A fast transfer is useful, but it is not the same thing as a dependable exit.

This article is provided for informational purposes only and does not constitute financial, legal or investment advice. Tokenized assets can carry market, liquidity, custody and issuer risks. Review official product documents before investing.