Tokenized U.S. equities are delivering two of crypto’s long-promised advantages – continuous trading and fractional ownership – yet the International Monetary Fund says the market is still in its infancy and fraught with risk.

Market size and participants

The IMF’s Global Financial Stability Report, titled Scaling Tokenization: New efficiencies and new vulnerabilities, estimates the broader tokenized real-world-asset market at roughly $65 billion as of the end of July, with tokenized stocks accounting for about $2.3 billion. By contrast, the total global equity market was valued at just under $160 trillion in 2025. A handful of platforms now facilitate these digital shares, including Bullish, OKX, Intercontinental Exchange, Coinbase, Kraken, Binance and Robinhood.

Trading behavior

Data on the five most actively traded tokenized U.S. stocks – Tesla, Nvidia, Alphabet and the Nasdaq-100 index – show that more than fifty percent of the activity occurs outside regular U.S. exchange hours. Additionally, around eighty percent of transactions involve less than a full share, highlighting investor interest in low-entry-point exposure. The report also notes that price changes occurring overnight in tokenized securities carry significant informational value: once the traditional market opens, over eighty-five percent of those moves are reflected in the corresponding conventional shares within five minutes.

Volatility and liquidity concerns

Compared with their physical counterparts, tokenized equities exhibit roughly one and a half times the price volatility and suffer from noticeably lower liquidity. The IMF points out that the market’s fragmentation – spread across private platforms, public blockchains, custodians and settlement tools – hampers the efficiencies that tokenization promises. Without unified legal frameworks, robust liquidity safeguards and interoperable settlement mechanisms, the sector’s growth could be constrained.

Potential benefits and systemic risks

Proponents argue that moving assets onto a blockchain could automate many back-office functions, such as dividend distribution and collateral transfers, while reducing the need for manual reconciliation. However, the IMF cautions that features like automated margin calls, continuous trading and cross-platform collateral movement might amplify market shocks, making containment more difficult than in traditional venues.

Outlook

The IMF’s analysis underscores that while demand for tokenized stocks is evident – driven by the appeal of 24/7 access and fractional buying – the market remains modest, volatile and illiquid. Realizing the technology’s full promise will require coordinated advances in regulation, liquidity provision and system interoperability.

Why it matters

Understanding the nascent state of tokenized equities helps investors, regulators and infrastructure providers gauge both the opportunities for cost-saving automation and the systemic vulnerabilities that could arise as the sector scales.