Tokenized Stocks Show Real Demand But Remain Volatile and Illiquid, IMF Finds

In brief

• The IMF’s latest Global Financial Stability Report found that more than 50% of tokenized stock trading occurs outside regular U.S. market hours, and about 80% of trades are for less than one share.
• Traditional stocks absorbed 87% to 99% of overnight tokenized price moves at the open, but tokenized equities were about 1.5 times more volatile and less liquid.
• The IMF said systemic risks remain limited for now and urged regulators to consider circuit breakers for 24/7 trading.

Tokenized stocks may be a small market, but their traders aren’t keeping Wall Street hours.

More than half of tokenized equity trading happens outside regular U.S. market hours, according to the International Monetary Fund’s latest Global Financial Stability Report. About 80% of trades involve less than a full share, a sign of strong demand for fractional ownership among retail investors.

Tokenized stocks are blockchain-based tokens that track the shares of publicly traded companies. The IMF studied the five most liquid tokenized U.S. equities, including tokens tracking Tesla, Nvidia, and the S&P 500, across 11 trading venues over 365 days.

The data suggest onchain prices carry real information. When markets reopened, traditional shares absorbed 87% to 99% of the overnight price moves their tokenized counterparts had made, the IMF found.