Tobias Adrian, Head of Capital Markets at the International Monetary Fund (IMF), pointed out that while tokenization can increase market efficiency, it can also create a structure more vulnerable to shocks. According to CoinDesk, he explained through his blog, "Tokenization makes financial transactions faster and more efficient, but it can also eliminate the safeguards that existed in the traditional financial system. If these buffers disappear, market shocks, program errors, or automatic sell orders could spread throughout the financial market before regulators can even respond." He further assessed, "The current global financial regulatory framework does not adequately reflect the real-time financial environment that tokenization enables. Market participants believe that tokenization will remain in a limited area unless the legal ownership, settlement validity, and applicable laws of tokenized assets are clearly defined."
