BIS Warns of Systemic Risk as Tokenized Treasury Funds Reach $9 Billion

The Bank for International Settlements has warned that tokenized money-market funds pose potential systemic risks after expanding from $770 million to nearly $9 billion in under a year. The organization cited concerns that instant on-chain settlement could outpace traditional asset liquidation during redemption surges, potentially creating liquidity mismatches. BIS also noted that some tokenized funds now serve as collateral for leveraged positions, which could enable rapid contagion across crypto sectors during periods of stress.