The International Monetary Fund warned that tokenization of financial assets could speed market transactions but also increase systemic risk if regulations are not updated. Tokenization moves assets such as stocks, bonds and bank deposits onto shared blockchain ledgers, enabling trades and settlements to occur in seconds through smart contracts. In traditional finance, settlement steps create time buffers that allow institutions to identify and respond to emerging problems. Tokenized processes eliminate those buffers, so shocks, coding errors or sudden automated selling can spread rapidly. The IMF said tokenization tends to concentrate activity on fewer large platforms, raising governance failure risks, and amplifies the need for strong cybersecurity and crisis management. Regulators have not yet aligned legal frameworks with the speed of tokenization, leaving questions about definitive ownership, settlement finality and applicable jurisdiction. For emerging economies, cross‑border token flows may cause volatile capital movements, rapid currency substitution and erosion of monetary sovereignty. The IMF urged clearer rules on ownership, finality and jurisdiction to prevent fragmentation and reduce systemic exposure.