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IMF Warns Tokenization Could Amplify Volatility Through Automated Markets

The IMF (International Monetary Fund) said tokenization may increase market stress through smart contracts (self-executing blockchain code) and called for clearer legal frameworks and stronger global coordination.

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Terms & Concepts
  • Tokenization: The process of representing real-world or financial assets as digital tokens on a blockchain.
  • Smart contract: Self-executing blockchain code that automatically carries out terms when preset conditions are met.
  • Automated markets: Trading environments where transactions and pricing are handled by programmed systems rather than manual intervention.