IMF Warns Tokenized Markets Could Trigger Flash Crashes, Raises Concerns Over Government Control
The International Monetary Fund has escalated warnings about tokenization's disruptive potential in global finance. While acknowledging efficiency gains like 20% cost reductions in asset management, the IMF cautions that instant settlement could replicate 2010-style flash crashes where $1 trillion vanished in minutes.
Tokenization represents the next evolutionary phase of money according to IMF analysts, building on historical transitions from shells to digital payments. However, fragmented platforms may undermine liquidity pools while automated processes create new systemic risks.
Major financial institutions including J.P. Morgan have validated the technology's cost-saving potential, but regulatory frameworks lag behind market innovation. The IMF's video briefing suggests policymakers must address this asymmetry before tokenized assets achieve critical mass.
