Tokenized Stocks Offer Always-On Access, but Liquidity and Stability Remain Concerns

Table of Contents

• You might want to know


• Main Topic


• Key Insights Table


• Afterwards...

You might want to know

• What practical benefits are investors finding in tokenized stocks, and do overnight price movements provide meaningful information about conventional markets?


• Why does the International Monetary Fund consider tokenized equities potentially useful while also warning about volatility, liquidity, and operational risks?

Main Topic

Tokenized stocks are digital representations of equities that can be traded on blockchain-based systems. They offer two features that have long been associated with digital asset markets: trading around the clock and the ability to purchase a fraction of a share. A recent study by the International Monetary Fund (IMF), included in its Global Financial Stability Report titled Scaling Tokenization: New efficiencies and new vulnerabilities, examines whether investors are using these features and what risks may accompany them.

The report considers the five most actively traded tokenized U.S. equities, including Tesla (TSLA), Nvidia (NVDA), and Alphabet (GOOG), as well as measures such as the Nasdaq 100 Index. Its analysis covers both centralized and decentralized trading venues. The findings suggest that tokenized stocks are not used solely as a way to experiment with blockchain technology: activity patterns point to demand for access outside conventional trading hours and for smaller transaction sizes.

More than half of tokenized-stock trading took place outside regular U.S. market hours. About 80% of trades involved less than one share. These figures suggest that investors value the ability to trade when traditional markets are closed and to obtain exposure without buying a whole share. Fractional trading can lower the amount needed to begin investing in a particular asset, although it does not remove the risks associated with changes in that asset’s price.

The study also identifies a possible connection between overnight activity in tokenized stocks and price discovery in conventional markets. According to the IMF, overnight price movements in tokenized shares carried useful information about their underlying equities. After U.S. markets opened, more than 85% of the overnight movement was reflected in the corresponding traditional shares within five minutes. This observation indicates that activity in tokenized markets may sometimes anticipate or register information that becomes visible in conventional trading. It does not, by itself, establish that tokenized trading causes those later price movements.

Demand for around-the-clock access does not mean that tokenized equities currently match the depth or stability of traditional share markets. The IMF found that tokenized stocks were about 1.5 times as volatile as equivalent shares traded on conventional venues and were significantly less liquid. Lower liquidity can make it more difficult to complete a trade at a predictable price, especially when activity is limited or market conditions change quickly. Volatility, meanwhile, means prices may move more sharply over a given period.

The central distinction in the IMF’s assessment is that investor interest and useful functionality are already evident, but the market’s scale and safeguards have not yet caught up with its promise. Tokenized equities remain a small part of a much larger financial system. The IMF estimated that the tokenized real-world asset (RWA) market was about $65 billion as of July 31, with tokenized equities accounting for roughly $2.3 billion. By comparison, the Securities Industry and Financial Markets Association (SIFMA), a trade group for the U.S. securities industry, reported 2025 global equity market capitalization of just under $160 trillion.

Despite the difference in scale, companies and trading platforms are continuing to develop tokenized-equity products. Bullish (BLSH), a Gibraltar-based crypto company and CoinDesk’s parent company, introduced tokenized equity trading in August. Earlier this month, OKX and Intercontinental Exchange (ICE), which owns and operates the New York Stock Exchange, filed plans for a venue offering round-the-clock trading in tokenized U.S. shares.

Other firms have also entered the area. Crypto exchanges Coinbase Global (COIN), Kraken, and Binance offer tokenized stock trading, as does Robinhood Markets (HOOD). The range of providers shows that tokenization is attracting interest across different types of financial and digital-asset businesses. However, the existence of multiple platforms does not necessarily mean that their products, rules, or technical systems are compatible.

That fragmentation is one of the main obstacles to realizing the anticipated efficiencies. Tokenization may reduce some of the manual work involved in reconciling records, automate processes such as dividend payments, and accelerate transfers of collateral. These benefits depend on the systems involved being able to communicate and on participants having confidence in how ownership and settlement are handled. Issuers, investors, trading venues, custodians, and settlement assets all need to function within compatible arrangements for savings in time and cost to become practical at scale.

At present, the ecosystem is divided among private platforms, public blockchains, custodians, and settlement tools that often do not work together. This can make it difficult to transfer assets or information smoothly from one system to another. Interoperability—the ability of different systems to connect and operate together—is therefore not merely a technical convenience. It is one of the conditions needed for tokenized markets to support broader participation and reliable settlement.

The IMF also points to risks that could arise from automation and continuous trading. Automated margin calls and liquidations may cause positions to be closed quickly when collateral values fall. Collateral moving between platforms can create additional dependencies, while 24-hour trading means activity continues when parts of the conventional financial system may be closed or less available. In a severe market shock, these features could make it harder to coordinate a response or contain stress.

The report notes that these risks remain limited in their current impact because tokenized markets are still small. But present scale should not be confused with a permanent limit on potential consequences. If adoption expands before legal, operational, and liquidity arrangements are sufficiently developed, weaknesses that are manageable in a small market could become more significant. The IMF therefore emphasizes developing safeguards before the market grows much larger.

Legal clarity is central to that effort. Market participants need reliable rules describing what ownership of a tokenized stock represents, how rights are enforced, and what happens if a platform or intermediary fails. Stronger liquidity safeguards are also important because trading access alone does not ensure that buyers and sellers will be available in sufficient numbers. In addition, systems need dependable links for transferring assets and settling transactions across platforms.

Gracy Chen, CEO of Bitget, expressed a related point: “Moving assets onchain is only the first step. The bigger question is how efficiently that capital can work once it is there.” The comment captures a broader issue in tokenization. Representing an asset digitally can change how it is recorded and transferred, but the usefulness of that representation depends on the quality of the surrounding market structure, legal framework, and financial services.

Overall, the IMF’s findings present tokenized stocks as an emerging market with observable use cases rather than a fully established replacement for conventional equity trading. Round-the-clock availability and fractional ownership appear to attract participants, and overnight activity may convey information relevant to traditional shares. At the same time, higher volatility, weaker liquidity, disconnected infrastructure, and unresolved legal questions remain material constraints.

Key Insights Table

Afterwards...

The next phase of tokenized finance will depend less on demonstrating that an asset can be represented on a blockchain and more on proving that the resulting market can operate reliably across institutions and systems. Research and policy work should focus on clear ownership rights, custody arrangements, settlement finality, and procedures for resolving disputes or platform failures. These foundations can help participants understand what a token represents and how they can exercise the rights attached to it.

Further exploration of interoperability is also important. Shared technical standards and secure links between public blockchains, private platforms, custodians, and established financial infrastructure could reduce friction, provided they do not create new single points of failure. Policymakers and market participants will also need to examine how liquidity behaves during periods of stress, especially when trading continues outside the hours of conventional institutions.

Automation deserves careful evaluation as well. Programmable payments, collateral transfers, and settlement may reduce manual processes, but automated systems need appropriate controls, monitoring, and ways to manage unexpected conditions. Testing how margin calls, liquidations, and cross-platform transfers behave during rapid price changes can help identify vulnerabilities before a larger market develops.

Tokenized stocks may ultimately complement conventional markets rather than simply replace them. Determining their long-term role will require evidence about investor protection, market quality, operational resilience, and the actual costs of connecting systems. The IMF’s findings point to both sides of the opportunity: demand for flexible access is already visible, while durable growth will depend on building the legal and technical safeguards that make that access dependable.

Source note: The source article includes a disclosure concerning CoinDesk’s ownership relationship with Bullish, its editorial policies, and potential Bullish equity-based compensation for employees, including journalists.