🌍 (2 July) International Monetary Fund Financial Market Infrastructures Evolution in a Tokenized Economy

📌 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.
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