Tokenized stocks remain a small corner of the equity market, but the people trading them are not keeping Wall Street hours. Regular U.S. equity trading runs only about six and a half hours a day, yet more than half of all tokenized equity trading takes place outside those hours, according to the International Monetary Fund's latest Global Financial Stability Report.

The report also found that about 80% of tokenized stock trades involve less than one full share — a pattern the IMF read as a sign of strong demand for fractional ownership among retail investors. Fractional access is native to crypto rails, where tokens are divisible into tiny units by design, in contrast with the traditional system, where fractional share trading depends on brokerage support.

Tokenized stocks are blockchain-based tokens that track the shares of publicly traded companies, giving investors price exposure to equities outside standard trading hours. For its analysis, the IMF studied the most liquid tokenized U.S. equities — tokens tracking Tesla, Nvidia, and the S&P 500 among them — across 11 trading venues over 365 days.

The data suggest that onchain prices carry real information. When traditional markets reopened, conventional shares absorbed 87% to 99% of the overnight price moves that their tokenized counterparts had recorded while U.S. markets were closed, the IMF found — a sign of how tightly the around-the-clock token market and the traditional session are becoming intertwined.

The drawbacks are just as clear. Tokenized equities were roughly 1.5 times more volatile than the underlying stocks and traded with far less liquidity — conditions that can make it harder to trade larger positions without moving prices — with the gap most pronounced on decentralized exchanges, where token prices strayed furthest from traditional markets.

The market itself remains tiny and highly concentrated. Tokenized equities are worth about $2.3 billion in aggregate — a sliver of the U.S. equity market, whose total value is measured in the tens of trillions of dollars — and Ondo Finance and Backed Finance's xStocks together account for more than 70% of the total. Both firms issue synthetic tokens that offer price exposure without direct share ownership, according to the IMF.

Given the market's early stage, the IMF said its findings "should be interpreted with caution," adding that systemic risks remain limited for now. It urged regulators to consider circuit breakers for 24/7 trading and to monitor links between tokenized and traditional markets more closely. Earlier this year, the IMF warned that tokenized finance and stablecoins could amplify financial crises.

The report lands as several of the largest U.S. financial institutions and trading venues push into tokenization. The New York Stock Exchange plans to reach crypto investors through Blockchain.com, while NYSE owner Intercontinental Exchange (ICE) is working with OKX on 24/7 tokenized stock trading under the SEC's new innovation exemption, a framework meant to give firms room to test novel products under regulatory oversight.

Securitize has also recently brought tokenized stocks — including shares of Nvidia, Apple, and Amazon — to Solana, with more blockchain networks to come. Cboe has struck an S&P deal for tokenized options, and Coinbase launched tokenized stocks for non-U.S. users on Base in August.

How regulators weigh the IMF's circuit-breaker and monitoring recommendations as venues like these come online is one of the threads to follow as the market moves beyond its early stage.