Tokenised Finance Needs More Than Faster Trading
The IMF’s October report explains why tokenisation needs reliable ownership rights, settlement and connected systems. Faster trading alone does not establish safety or profitable adoption.
By The Strategic Newb Editorial Team
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Tokenisation promises to change the machinery behind investing. The International Monetary Fund’s October financial-stability chapter examines that promise alongside its risks. The practical question is whether a digital token makes a financial claim easier to use without weakening ownership rights, access to cash or resilience when markets become stressed.
This is a new analysis of an existing October report, not a claim that it first appeared today. Payment Expert covered the chapter on 8 October; the IMF library labels its collected chapters 12 October. We read the original chapter for the substance and distinguish those dates.
- A token is a digital representation; its legal rights depend on the product’s structure.
- Shared records can simplify work, but useful savings require compatible systems and reliable settlement.
- Faster transactions do not eliminate liquidity, credit or operational risk.
What changes when an asset becomes a token?
Tokenisation records a financial asset or claim on a programmable digital ledger: a shared system for recording transactions. A share represents ownership in a company. A token linked to that share might convey ownership, a claim against a custodian or only economic exposure to its price. The label alone does not tell the investor which relationship applies.
That distinction matters before any discussion of trading speed. Who must deliver dividends? Who handles a company takeover? What can the holder recover if an intermediary fails? These questions connect the digital record to the real institution responsible for fulfilling it. A technically successful transfer does not, by itself, settle every legal question about the underlying claim.
Where the potential savings come from
Conventional transactions can require several organisations to compare their own records. If each records a different quantity or date, employees must investigate and reconcile the difference. A shared ledger could reduce repeated checking. Programmable instructions could also automate routine payments or transfers when clearly defined conditions are met.
The economic gain is the cost saved after implementation, not the number of transactions advertised. A business still needs software integration, compliance staff, secure access, incident handling and a way to correct errors. Running old and new systems together may initially increase expenses. Higher transaction volume is evidence of activity; it is not automatically evidence of profit or lower customer charges.
Settlement is the crucial connection
Settlement means completing the transfer of the asset and the payment. Trading a token around the clock is less useful if the money needed to complete the trade is unavailable outside banking hours. Equally, a platform can work smoothly internally while remaining difficult to connect to another venue. Interoperability means those systems can exchange usable information and value.
The IMF chapter identifies legal certainty, clear regulation, interoperability and safe settlement as connected requirements. Improving just one leaves the others as possible bottlenecks. The report’s roughly US$65 billion public tokenised-asset estimate refers to July 2026 and excludes repos, private markets and stablecoins. It is an asset-value estimate, not a daily trading-volume figure.
A repo is a short-term financing transaction in which securities are sold with an agreement to repurchase them. Repeated repo transactions can generate large trading volumes without creating an equally large amount of new assets. Comparing a stock of assets with a flow of transactions gives a misleading impression of market size.
Who could benefit, and who faces new work?
Banks, issuers and fund administrators could benefit if automation reduces reconciliation and settlement work. Customers could gain more flexible access or smaller transaction sizes. Whether those savings reach customers depends on competition, fees and the cost of maintaining the service. Infrastructure providers may gain contracts while existing intermediaries must adapt their roles.
Liquidity means being able to trade a useful amount without moving the price sharply. An always-open market can still have few willing buyers. Automation can speed up a sale when collateral becomes insufficient, but many automatic sales at once can strain a thin market. Software removes some manual delays; it does not manufacture buyers or repair a weak borrower’s finances.
Evidence and time horizon
Today, the report provides evidence of actual tokenised activity and identifies practical constraints. Over one to three years, relevant tests include reliable connections between systems, enforceable rights and measured operating costs. Wider transformation is a longer-term possibility, not a dated promise. A pilot, commercial deployment and a profitable business are three different stages.
What to watch next
Watch for published product rights, settlement arrangements, recovery procedures and cost comparisons that include implementation. For a new investor, separate the asset’s risk from the platform’s risk and from the token used to pay network fees. Growth in financial tokenisation does not guarantee that any particular crypto-token or listed company will capture the value.