This page may contain stale information. Last updated: 2026-07-03
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Definition
Systemic risk is the potential for failure or stress in one part of the financial system to cascade across institutions, markets, and economies. The imf warns that tokenization and instant settlement can amplify propagation speed by removing traditional shock buffers (e.g., T+2 settlement delays).
Key Points
- Instant settlement removes friction but also removes time buffers that absorb market shocks
- Automated margin calls and platform concentration can accelerate crisis propagation
- Risk may migrate from bank balance sheets to platforms and smart contracts
- stablecoin structures share run vulnerability patterns with money market funds