IMF Reveals Over Half of Tokenized US Stock Trading Occurs After Wall Street Closes

Background Context

The IMF's October Global Financial Stability Report found that over half of sampled tokenized US stock trading occurs outside Wall Street's regular hours. The study also showed that approximately 80% of tokenized equity transactions involved less than one share, providing evidence of demand for fractional investments and around-the-clock access to American securities.

Key Findings

The IMF examined five of the most actively traded tokenized US equity products issued by Ondo and xStocks, covering exposure to the S&P 500, Nasdaq, Tesla, Alphabet and Nvidia. The analysis covered 11 centralized and decentralized trading venues, with more than 2 million five-minute price and trading-volume observations collected over 365 trading days.

Market Implications

The study found that tokenized stock prices reflect overnight market activity and that conventional exchanges are adjusting rapidly once trading resumes. However, the growing activity outside Wall Street's operating hours comes with significant differences in market quality, including lower liquidity and higher volatility.

Regulatory Challenges

The IMF identified legal certainty, regulatory clarity, interoperability between trading networks and reliable settlement assets as major constraints on further growth. The study also highlighted the potential risks of automated collateral management triggering margin calls and forced liquidations outside conventional trading hours.