More than half of sampled tokenized US stock trading happened outside regular market hours. The IMF found these markets were more volatile and less liquid than traditional exchanges.
The IMF's sample captured more than 2 million five-minute price and trading-volume observations across 365 trading days.
More than half of that trading took place outside regular Wall Street hours. Tokenized equities also recorded about 50% higher realized volatility than their traditional counterparts.
The gap matters beyond convenience. Thin markets can magnify price moves, while continuous trading may expose collateral systems to forced sales when conventional exchanges are closed.
About 80% of transactions in the IMF's sample involved less than one share, highlighting how fractional trading shapes activity in tokenized equities.
Trading beyond Wall Street
In its October Global Financial Stability Report, the IMF studied five actively traded tokenized US equity products issued by Ondo and xStocks. The products tracked the S&P 500 and Nasdaq. Other products followed Tesla, Alphabet or Nvidia across 11 centralized and decentralized venues.
The sample represented about $345 million in market value, roughly 15% of the $2.3 billion tokenized-equity market as of July 31, 2026.
More than half of sampled trading volume fell outside the regular 9:30 a.m. to 4 p.m. Eastern session, including overnight and weekend periods. About 80% of transactions involved less than one share. That trade size is consistent with fractional investing, but the researchers did not identify individual traders. Calling the activity retail-oriented is an inference, not a direct count of retail users.
Ondo Finance and xStocks together controlled more than 70% of the tokenized-stock market's value as of July 31, 2026. The IMF also found these products were about 1.5 times as volatile as comparable traditional equities and substantially less liquid.
Prices carry information
Overnight prices did more than keep trading open while US exchanges were shut. Comparing returns on centralized tokenized venues with the first five minutes of the next US session, the IMF estimated that overnight price movements passed through to underlying securities at a rate of 87% to 99%.
That finding suggests tokenized markets can incorporate information before conventional exchanges reopen. It does not show that tokenized trading causes the next session's price adjustment. Both markets may be reacting to the same news, with traditional shares catching up when trading resumes.
The volatility comparison needs context: tokenized products trade continuously, while the traditional-market measure covers regular US hours. Even with that difference, the IMF found tokenized-equity volatility was about 1.5 times higher. Decentralized venues showed greater volatility still.
Liquidity and safeguards
Traditional exchanges were substantially more liquid than tokenized platforms. Centralized crypto venues performed better than decentralized exchanges. On decentralized venues, limited market depth and market-making activity meant even relatively small trades could move prices sharply. Those venues also showed wider and more frequent price deviations, particularly when volume was low.
The wider market remains small beside conventional finance. The IMF put tokenized real-world assets at about $65.1 billion as of July 31, 2026, excluding repurchase agreements and stablecoins. Tokenized equities accounted for about $2.3 billion. The Fund said systemic risks remain limited at current adoption levels, but warned that continuous trading and automated settlement could transmit stress more quickly as usage expands.
Automated collateral management adds a risk: a price move can trigger margin calls and forced liquidations overnight or on weekends, when available liquidity may be thin. The IMF warned that automatic clearing can accelerate forced collateral sales. It made the same point about instant settlement. Continuous trading can also speed those sales, while programmable systems can amplify shocks during market stress. Similar timing and collateral constraints have affected crypto-market hedges, as described in this collateral squeeze report.
The IMF identified legal certainty around ownership rights as a barrier to wider adoption. It also cited regulatory clarity and interoperability between blockchain networks. Reliable settlement assets, including safe money for settlement, remain another requirement. On September 17, 2026, the SEC issued a five-year Innovation Exemption allowing registered broker-dealers and alternative trading systems to trade tokenized stocks on public blockchains under specified conditions. The IMF's tokenization analysis argues for technology-neutral regulation and stronger supervision. It also calls for safeguards such as trading limits.
Tokenized equities have demonstrated a use case for after-hours access and fractional transactions. The evidence does not establish that continuous availability delivers the same execution quality or investor rights as conventional shares. Liquidity means being able to trade without sharply affecting the price; it depends on buyers, sellers and market depth being available when an order arrives. That constraint grows more consequential when automated collateral rules can force sales outside standard sessions.
Token holders' rights depend on how a product is structured: a blockchain token may represent direct ownership of shares or only a contractual claim tied to their prices.
