- Asia’s major institutional investors are increasingly seeking exposure to digital assets and cryptocurrencies, according to recent research.
- A survey conducted by SBI Digital Assets Holdings, a subsidiary of Japanese asset manager SBI Holdings, reveals a growing corporate demand for cryptocurrencies.
- “This trend indicates that digital assets are becoming more accepted in diversifying investment portfolios,” the report states.
Explore the growing interest of Asian institutional investors in cryptocurrencies and digital assets, highlighting the potential shifts in investment strategies.
Increased Institutional Demand for Cryptocurrencies
The survey highlighted that approximately 60% of Asian institutional investors had exposure to some form of digital asset last year. Nearly 40% of these institutions plan to increase their exposure in 2024, with 25% planning “significant increases.”
Diverse Interests in Digital Assets
While 67% of institutions currently engaged with digital assets are most interested in cryptocurrencies, 33% anticipate that central bank digital currencies (CBDCs) will be the most adopted over the next three years. Real-world asset tokenization is also a priority, with nearly 62% of institutions reporting demand from their clients for tokenized securities.
Tokenization of Real-World Assets
When asked about which assets they prioritize for tokenization, 40% of institutions mentioned real estate, followed by funds, physical infrastructure, bonds, and collectibles such as art pieces, each garnering about 14% to 10% interest. The remaining preferences were split between stocks and precious metals.
Benefits and Challenges of Asset Tokenization
The report notes that nearly half of the participants see the reduction of intermediaries as the primary benefit of asset tokenization, along with faster payments, cost efficiency, enhanced transparency, and increased liquidity. However, 60% of participants identified the lack of a reliable end-to-end transaction ecosystem as the biggest barrier to adoption.
Regulatory and Cybersecurity Concerns
Only 20% of institutions consider cyber threats as a major danger, whereas 18% cite a lack of regulatory clarity in the sector as a significant issue.
Conclusion
This survey underscores a significant shift towards digital assets among Asian institutional investors, driven by the benefits of diversification and efficiency. However, the adoption faces hurdles such as the need for a robust transactional infrastructure and clearer regulations.
