Banks are increasingly investing in digital assets, but many are still struggling to turn that ambition into live, revenue-generating services, according to a new report from Zodia Custody.
The Zodia Solutions Handbook found that 88% of banks have allocated budgets to digital asset initiatives, yet only around one in six has successfully deployed live infrastructure. Just 15% consider their custody infrastructure fully production-ready.
The report argues that custody should be treated as the foundation rather than the destination for institutional digital asset strategies. Banks are increasingly looking beyond safekeeping towards trading, collateral management, staking, lending, repo, tokenisation, stablecoin infrastructure and settlement.
“Custody purely creates the utility infrastructure and is the foundation; it doesn’t necessarily always create commercial success,” said Craig Perrin, Chief Commercial Officer at Zodia Custody.
The report identifies five key barriers to progress: weak commercial business cases, immature operating models, skills and knowledge gaps, difficulties scaling from pilots to production, and the cost and resources required to build institutional-grade infrastructure.
It also highlights the gap between proving technology works and making it viable at scale. Production-ready solutions need to integrate with existing custody, treasury, settlement, compliance and reporting systems while meeting the requirements of boards, regulators, risk teams and clients.
“Those who integrate into existing plumbing are production ready; those who don’t are just running pilots,” said Sahil Sood, Product Innovation & Advisory Specialist at Zodia Custody.
Tokenisation, particularly of real-world assets, is identified as a major opportunity, alongside growing institutional interest in stablecoins for payments and settlement. Staking, lending and collateral management could also help institutions make digital assets more productive.
Looking ahead, Zodia expects the market to become increasingly interconnected, with custodians, trading venues, settlement systems, tokenisation platforms and blockchain networks working together rather than operating in isolation.
“Blockchain’s value comes from networks, not silos,” said Nejda Aliyeva, Head of Product – Core Platform.
The report concludes that the next phase of institutional digital assets will be defined less by experimentation and more by commercial execution, interoperability, governance and the ability to operate safely and at scale.
