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 on his blog, "Tokenization makes financial transactions faster and more efficient, but it can also eliminate the safeguards that the existing financial system had in place. If these buffers disappear, market shocks, program errors, or automatic sell orders could spread throughout the financial market before regulators can even respond." He added, "The current global financial regulatory framework does not adequately reflect the real-time financial environment that tokenization implements. 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."
