IMF research finds that over 50% of tokenized asset trading occurs outside traditional market hours.
RWA & Tokenization ·
Research from the IMF finds that more than half of tokenized asset trading occurs outside traditional market hours, reflecting demand for continuous around-the-clock access. The finding emerges from analysis of tokenized markets, which remain modest in size relative to traditional finance: repos average $300 billion to $350 billion in daily volume, while other tokenized assets add roughly $65 billion daily, compared to a $13 trillion US repo market and $300 trillion in global capital market assets.
The research attributes the shift to inherent characteristics of tokenized trading. Fractional ownership is prevalent, with around 80 percent of tokenized equity trades analyzed executing in sizes smaller than one share. Overnight returns in tokenized equities are reflected in traditional equity prices shortly after market open, suggesting both markets respond to similar information signals. However, tokenized markets currently exhibit higher volatility and lower liquidity than their traditional counterparts, with fragmentation across multiple platforms and settlement systems weakening price formation efficiency.
The IMF identifies several barriers to broader adoption and growth, including legal certainty for tokenized asset rights, regulatory clarity on how existing rules apply to new ledgers, platform interoperability to replace isolated liquidity pools, and reliance on safe, widely accepted settlement assets. Scaling these markets poses new risks, including potential amplification of traditional financial stresses such as fire sales and contagion through increased interconnectedness.