A study finds over 50% of asset managers aim to hold tokenized assets, with 29% planning to offer tokenized funds in the next 5 years
According to a recent study conducted by financial software experts Bravura and the Investment Association, asset managers are eager to include tokenized assets. There are, nevertheless, several barriers preventing broad adoption.
As per the report, more than 50% of the participants intend to possess tokenized assets in the next one to ten years. This is hardly surprising, given that 29% of respondents, or one in three, said they anticipated offering tokenized money in the next one to five years. This number is probably going to increase in light of the FCA’s announcement last week that there aren’t any major regulatory obstacles to adoption when it comes to the industry’s tokenization blueprint model.
According to the report, fund managers who oversee assets worth over £8.5 trillion really think that digital assets are more of an evolution of the current investing environment than a complete digital revolution.
When comparing digital assets to traditional investing instruments, respondents felt that better trading was the biggest advantage. Along with settlement and liquidity, this was followed by cost reduction. Simplifying the process for everyone and giving financial product creators more freedom are two further advantages.
The poll was carried out prior to the blueprint’s release. The findings indicate that innovation and uptake are being slowed down by ineffective industry collaboration. As a matter of fact, the vast majority of responders (85%) think that this stands in the way of wider acceptance. The absence of effective regulation comes next (79%). An other significant worry is the increased uncertainty and the 50% priority given to other projects.
The value of teamwork
The Investment Association’s head of innovation and operations, John Allan, stated: “Investment businesses stand to gain significantly from the potential of digital assets and related technologies. The industry, the larger funds ecosystem, and the UK authorities have successfully collaborated on fund tokenization, as demonstrated by the recent work done through the Asset Management Taskforce.
This provides as an example of how to work together in more general contexts, such the use of digital assets and digital currencies in investment portfolios. We are already working together with the sell-side to make sure the UK stays competitive in this quickly changing industry.
The poll indicates that although UK fund managers believe digital assets will be a substantial investment class, they will coexist with other sorts of conventional investments in the future, according to Ian Hutchinson, head of growth EMEA at Bravura. The biggest fund managers in the UK are showing some reassurance in this area, which is encouraging as this is clearly a development towards a new, more efficient style of investing.
“I think we’ll only start to see more interest in this potentially game-changing technology for funds administration as regulation catches up with innovation, following the Asset Management Taskforce’s recently published implementation blueprint.”
