Scan to Download Gate App
qrCode
More Download Options
Don't remind me again today

The IMF warns that tokenization may exacerbate the risk of flash crashes... Expect government regulatory intervention.

image

Source: DigitalToday Original Title: IMF warns that tokenization could deepen flash crashes… Government intervention expected Original Link: International Monetary Fund(IMF)

The International Monetary Fund ( IMF ) also emphasizes the advantages and risks of the tokenized market.

According to reports, the IMF pointed out that while tokenization can make financial transactions faster and cheaper, it may also exacerbate volatility and trigger a flash crash (Flash Crash).

Tokenization makes it possible to reduce costs and achieve instant settlement by eliminating intermediaries in the existing financial system, but automated trading carries the risk of triggering sharp market declines. In particular, smart contracts can act like a domino effect, causing localized issues to escalate into systemic shocks.

In addition, the IMF is concerned that if there is a lack of interoperability between tokenization platforms, the market may become fragmented, leading to a deterioration of liquidity. Historically, governments have always been involved in financial innovation, and the IMF predicts that the regulatory role in the tokenization market will expand.

The IMF cites the 1944 Bretton Woods Agreement as an example of how governments redesigned the global monetary system, suggesting that the tokenized market could similarly develop within a regulatory framework.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
0/400
No comments
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
English
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)