Calastone has revealed that tokenisation holds the potential to unlock over $135 billion in cost savings for the asset management industry.
The global funds network’s latest study, Decoding the Economics of Tokenisation: Transforming Cost Dynamics in Asset Management, is the most comprehensive economic analysis of fund operating costs to date.
By leveraging tokenisation, asset managers could cut operational costs by 23%, while also accelerating speed to market of new fund launches and improving overall profitability, according to the research.
“Tokenisation is already becoming a core pillar of strategy for asset managers, offering a path to greater efficiency, flexibility, and competitiveness,” said Brian Godins, chief commercial officer at Calastone.
“Our research highlights the scale of the opportunity, with tokenisation capable of unlocking over $135 billion in cost savings and streamlining fund issuance, administration and distribution.”
For the average fund, tokenisation is set to deliver a total profit and loss improvement of $3.1 million to $7.9 million, including increased revenue estimated at $1.4million to $4.2 million per fund based on more competitive TERs.
“While adoption will be incremental, the direction of travel is clear – tokenisation represents the next stage in the evolution of investment vehicles, building on the legacy of mutual funds and ETFs,” added Godins.
“As firms explore its benefits, we expect to see a gradual integration alongside existing structures, enabling asset managers to modernise at their own pace.”
Accelerated fund launch, shedding the average launch time of 12 weeks to just three weeks, was also revealed in the study, alongside the reduction of seed funding requirements by 24% through tokenisation.
