What's the point if it grows to $60 billion...IMF "97% of tokenized assets inaccessible to retail investors"

▲ Real World Asset Tokenization (RWA)/AI generated image

The International Monetary Fund (IMF) has issued a warning that is pouring cold water on expectations of institutional adoption, stating that despite the tokenized asset market growing to $60 billion, it is not even clear who legally owns the assets.

According to the cryptocurrency specialized media BeInCrypto on July 3 (local time), the IMF warned that if tokenized assets fail to resolve issues of legal ownership and settlement finality, they will remain on the periphery of the financial market rather than moving to its center. BeInCrypto Research estimated the size of the tokenized real-world asset (RWA) market, excluding stablecoins and repurchase agreements, to be approximately $60 billion as of May 31.

Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department at the IMF, diagnosed tokenization as not just a technological improvement but a change that alters the very structure of the financial system. Adrian stated, "Market participants need to know whether tokenized records constitute definitive ownership, whether settlement finality is legally recognized, and which jurisdiction's laws apply." He added, "Without clarity, tokenization will remain in fragmented peripheral markets."

According to BeInCrypto Research, the tokenized asset market is not a single integrated market but is fragmented into multiple markets depending on regulatory frameworks, regions, and investor status. Approximately 97% of the total value was classified as inaccessible to U.S. retail investors or lacking regulations at the level of retail investor protection.

Tokenized assets accessible to retail investors amounted to only $1.7 billion. In contrast, qualified U.S. investors were found to have access to approximately $8.3 billion, including Regulation D products. Contrary to expectations that tokenization would expand financial accessibility, the actual market is structured such that access varies significantly based on investor qualifications and regulatory barriers.

The form of ownership was also cited as a key issue. Tokens are divided into direct ownership, fund shares, and synthetic exposure structures, with synthetic structures tracking only price fluctuations without actual asset claims. According to the report, 59% of all stock tokens provide synthetic price exposure rather than actual stock ownership.

Regulatory gaps are also a variable hindering market expansion. Approximately 39% of the total market was found to lack an identifiable regulatory framework, and the report identified this area as a due diligence risk for asset allocators. The IMF's concerns and BeInCrypto Research data show that the next challenge for the tokenization market lies in resolving issues of ownership, settlement, and jurisdiction rather than technology.

[Article Key Summary]

-The IMF warned that if tokenized assets do not resolve issues of ownership and settlement finality, they will remain on the periphery of the financial market.

-BeInCrypto Research estimated the tokenized real-world asset market, excluding stablecoins and repurchase agreements, to be approximately $60 billion.

-Approximately 97% of the total value was classified as inaccessible to U.S. retail investors or lacking regulations at the level of retail investor protection.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*