IMF Issues Warning: Tokenized Markets Expose Investors to Flash Crash Risks

The International Monetary Fund (IMF) has released a video outlining the potential of tokenized markets to speed up trading, but also warning of amplified flash crashes. The IMF argues that while tokenization removes the need for intermediaries and automates clearing and settlement, it could make financial markets more volatile due to instant trades without buffers. This raises concerns about the risks of fragmented platforms lacking liquidity and the possibility of cascading smart contract effects during market stress events.