Tokenisation refers to the process of representing assets such as bank deposits, bonds and other financial instruments digitally on blockchain-based infrastructure. According to the IMF, the technology is moving beyond experimentation and is increasingly being adopted by major financial institutions.
The Fund notes that tokenisation could reduce settlement costs, improve transparency and enable faster transactions by allowing assets to be transferred and recorded on blockchain networks. These efficiencies are driving growing interest from both traditional financial institutions and technology firms.
A key trend highlighted in the report is the increasing convergence between conventional finance and blockchain-based systems. Banks that once relied primarily on private blockchain networks are now exploring the use of public blockchain infrastructure, while fintech companies are introducing stronger governance and oversight mechanisms to meet regulatory requirements.
The IMF says the industry appears to be moving toward hybrid models that combine the openness and innovation of public blockchain networks with the controls and safeguards required by regulated financial institutions.
The report also points to rising interest in tokenised deposits and stablecoins as emerging forms of digital money. Tokenised deposits represent traditional bank liabilities recorded on blockchain systems, while stablecoins are privately issued digital assets designed to maintain a stable value, typically through backing by reserve assets.
Despite the potential benefits, the IMF warns that important policy and regulatory questions remain unresolved. These include how stablecoins should be supervised, whether private issuers should have access to central bank payment systems, and how risks would be managed if stablecoin issuers were to come under financial stress.
For African countries, the technology could support more efficient payment systems, improve cross-border transactions and contribute to greater financial inclusion. However, the IMF cautions that legal frameworks, interoperability standards and consumer protections will need to evolve alongside technological adoption.
The report emphasises the role of central banks in the emerging ecosystem, arguing that public institutions remain crucial in providing trusted settlement infrastructure and ensuring financial stability. Central banks can also help reduce market fragmentation by promoting common standards and maintaining confidence in payment systems.
According to the IMF, the long-term success of tokenisation will depend on achieving a balance between encouraging innovation and maintaining adequate safeguards for investors, consumers and the broader financial system.
The Fund concludes that while tokenisation has the potential to reshape global finance, its broader adoption will require careful regulation, effective governance and continued cooperation between policymakers, financial institutions and technology providers.
–IMF/ChannelAfrica–
