IMF Cautions on Tokenization Risks Amid Financial Innovation Surge
Tokenization is reshaping global finance, promising unprecedented efficiency and speed. BlackRock and Franklin Templeton are already capitalizing on this trend, tokenizing assets to bypass traditional intermediaries. Yet the International Monetary Fund warns of systemic risks lurking beneath the surface.
Automated markets could amplify volatility, making crashes more frequent and severe. The lack of interoperability between platforms threatens liquidity, while programmable finance opens doors to systemic abuse. Regulators are preparing to step in, aiming to balance innovation with stability.