The International Monetary Fund has issued a warning that stablecoins resemble money market funds more than genuine money and could be vulnerable to confidence-driven runs as tokenized finance continues to expand. Tobias Adrian, financial counsellor and director of the IMF’s monetary and capital markets unit, wrote that tokenization represents a structural reallocation of trust within the financial system. The report argues that this shift carries significant implications for how regulators and central banks manage financial stability.
Traditional financial systems depend on built-in delays such as end-of-day settlement and batch processing, which give authorities time to intervene before problems escalate. Tokenization removes those buffers by making settlement continuous and automated, meaning liquidity crises could emerge almost instantaneously. The report identifies a fundamental mismatch between tokenized systems that operate across borders at machine speed and crisis management frameworks designed around national jurisdictions.
The IMF also raised concerns that key levers of control in tokenized finance may reside in code and governance keys rather than in institutions that regulators can directly reach. Adrian outlined a five-pillar policy roadmap urging governments to anchor tokenized settlement in safe assets such as wholesale central bank digital currencies and to apply consistent regulation across comparable activities. The roadmap also calls on central banks to adapt their liquidity tools to function within automated environments.
The report further recommended that legal mandates for financial stability must ultimately take precedence over automated execution. It proposed mandatory audits and override mechanisms for systemically important smart contracts, including the ability to pause operations under emergency conditions. This latest publication follows a series of escalating IMF warnings on digital assets, including a joint roadmap with the Financial Stability Board and a late-2025 caution that stablecoin adoption could weaken central bank control.
Observers offered mixed assessments of the report’s conclusions. Siwon Huh, a researcher at crypto research firm Four Pillars, told Decrypt that the report’s framing treats the current financial system as an implicit safe baseline while focusing only on tokenization’s incremental risks. He noted that standard settlement delays and opaque over-the-counter derivatives already carry their own systemic vulnerabilities, which the report does not adequately address. Nevertheless, Huh acknowledged that the IMF’s comparison of stablecoins to money market funds serves as an important corrective to industry claims that stablecoins function as money.
Major stablecoins such as USDT and USDC hold reserves composed of Treasuries, reverse repos, and cash, making them essentially identical to a prime money market fund without the accompanying regulatory safeguards, Huh explained. Alan Qureshi, CEO and co-founder of financial technology firm Black Lake, offered a different perspective, arguing that stablecoins are not designed to replicate central bank money. He described regulated stablecoins backed by high-quality assets as localized liquidity pools that distribute collateral across the financial system, and characterized the speed-versus-intervention tradeoff as a feature of a system built to operate faster than traditional finance.
Neil Staunton, CEO and co-founder of fintech firm Superset, largely agreed with the report’s framing but cautioned that excessive regulatory alarm could be counterproductive. He warned that policymakers who are deterred by these warnings may slow down the infrastructure development that would ultimately deliver the stability outcomes the IMF itself is seeking. Staunton noted that tokenized systems replace slow settlement with cryptographic safeguards such as smart contracts and real-time verification, describing these as different tools rather than weaker ones. He also pointed out that exchanges including the NYSE and Nasdaq are already building the kind of coordinated infrastructure the IMF’s roadmap envisions.
Originally reported by Decrypt.
