IMF analyzes how tokenized systems enable simultaneous trading, clearing, and settlement, improving efficiency but removing risk buffers.
RWA & Tokenization ·
The International Monetary Fund has analyzed how tokenized financial systems alter the mechanics of asset trading and settlement. In such systems, trading, clearing, and settlement occur in parallel, compressing multiple steps that traditionally happen sequentially.
This simultaneity delivers efficiency gains by reducing delays and operational complexity. However, the compression also eliminates time and procedural buffers that conventional markets rely on to absorb volatility and contain contagion when prices move sharply or participants face stress.
The structural trade-off—faster processing versus fewer shock absorbers—raises open questions about how tokenized markets would perform during periods of acute volatility, what safeguards might be needed in their place, and how regulators should approach oversight of systems that operate at fundamentally different speeds than today's markets.