Financial Market Infrastructures Evolution in a Tokenized Economy

Yaiza Cabedo, Tommaso Mancini-Griffoli, Fabian Schär and Nicolas Zhang

No 2026/136, IMF Working Papers from International Monetary Fund

Abstract: This paper examines how tokenization and distributed ledger technology may transform Financial Market Infrastructures (FMIs) by enabling smart contracts to perform a growing share of functions traditionally undertaken by central securities depositories, central counterparties, and trade repositories. It argues that while record-keeping, settlement, collateral management, and reporting can increasingly be executed on-chain, key functions requiring legal certainty, governance, accountability, and discretion remain institutional in nature. The analysis assesses which activities across issuance, clearing, settlement, and reporting can migrate to code, where limitations persist, and how risks evolve in tokenized environments. It finds that tokenization is more likely to reconfigure than eliminate FMIs, creating new efficiencies while introducing novel operational and governance risks. The most plausible outcome is a hybrid FMI model in which technology and institutions jointly provide the trust, resilience, and oversight required for financial stability.

Keywords: Tokenization; central counterparty; securities settlement system; central securities depository; trade repository; blockchain; smart contracts (search for similar items in EconPapers)
Pages: 52
Date: 2026-07-02
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