On April 2, 2026, the International Monetary Fund (IMF) published a paper authored by Tobias Adrian, the Financial Counsellor and Director of the Monetary and Capital Markets Department of the IMF, entitled Tokenized Finance. The paper contends that the growing ubiquity of tokenization in global financial markets goes beyond a mere technological enhancement; instead, it signals a restructuring of the foundations underpinning the financial system (Adrian, Tobias. 2026. ‘Tokenized Finance,’ IMF Note 2026/001, International Monetary Fund, Washington, DC). The paper comes at a pivotal moment, as regulatory bodies around the world work to determine how digital assets fit within established market structures, bearing weight on decisions from policymakers, financial institutions, and market participants.
The paper’s main takeaway is that technology by itself will not dictate how this transition unfolds. Rather, the trajectory of tokenized finance will be defined by coordinated policy decisions concerning settlement assets, governance structures, legal regimes, and cross-border cooperation.
Fundamentally, tokenization involves recording financial assets and liabilities on programmable digital ledgers, a process that is steadily transforming the issuance, trading, settlement, and management of securities. The IMF observes that the most far-reaching changes are taking place within regulated finance, spanning banks, asset managers, and market infrastructures, where tokenization facilitates instantaneous settlement, ongoing liquidity oversight, and compliance mechanisms built directly into the technology. In contrast to earlier rounds of digitization, which enhanced efficiency without altering institutional frameworks, tokenization fundamentally reshapes the structures governing trust, settlement, and risk management.
Adrian highlights three characteristics that set tokenization apart from traditional digitization: (1) programmability, enabling financial contracts to self-execute; (2) shared ledgers, which supplant bilateral reconciliation with a unified and synchronized record; and (3) the ability to achieve settlement finality in near real time. Collectively, these attributes relocate risk from individual institutions to the underlying infrastructure itself, a shift that, as the IMF emphasizes, demands a parallel modernization of regulatory frameworks.
The paper also examines the evolving landscape of digital money, outlining three primary forms: tokenized commercial bank deposits, regulated stablecoins, and wholesale central bank digital currencies. Each category distributes risk differently between public and private actors. The IMF stresses that maintaining par convertibility among these instruments is critical to upholding the unity of money across the financial system.
Importantly, the paper cautions that tokenization brings new systemic vulnerabilities even as it delivers efficiency improvements. Market stress episodes in tokenized environments are expected to develop more rapidly than in conventional systems, narrowing the window for authorities to intervene. Automated margining and collateral mechanisms could intensify procyclical pressures, while the inherently cross-border character of tokenized finance poses fresh challenges for supervisory oversight and crisis response.
In response, the IMF proposes a five-pillar policy framework: (1) grounding settlement in safe monetary assets, (2) adopting consistent global regulatory standards, (3) establishing legal clarity for tokenized instruments, (4) fostering interoperability through international coordination, and (5) retooling liquidity and crisis management tools for a continuously operating, automated environment.
This publication reinforces a broadening consensus among regulators and international institutions: tokenization is not a niche innovation but a defining challenge for financial stability and monetary policy in the coming years. As Adrian concludes, the opportunity to shape the design of the tokenized financial system remains available, but that window is narrowing.
