IMF Flags Tokenized Stock Market as Small and Volatile Despite Rising Interest

The IMF found that tokenized equities are significantly less liquid and more volatile than the stocks they track, trading at approximately 1.5 times the volatility of the underlying shares. More than 50% of tokenized stock trading takes place outside regular U.S. market hours, and about 80% of trades involve less than a single full share, pointing to demand for fractional ownership and round-the-clock access.

The analysis also indicated that on-chain prices may carry information relevant to conventional markets: traditional markets absorbed between 87% and 99% of overnight price movements in tokenized equities once U.S. trading resumed.

The findings come as established financial firms and crypto platforms continue to expand their tokenization efforts. Trading activity on networks including Solana and BNB Chain largely occurs outside Wall Street hours, Cointelegraph reported.

South Africa's First National Bank has teamed with local exchange VALR to let customers trade several cryptocurrencies directly through the bank's app.