Institutional adoption of digital assets has moved squarely from theoretical to practical, with nearly half of asset owners exposed to digital assets, according to research by Northern Trust.
The Northern Trust Global Asset Owner Peer Study found 47% of respondents had direct or indirect exposure to digital assets, with 40% of them allocating more than $10 million.
The report surveyed more than 180 asset owners including OCIOs, pension funds and insurance general accounts. Of the organisations holding digital asset investments, 46% held cryptocurrencies and 44% held exchange-traded funds (ETFs) with a natively digital investment strategy, making those the two most popular vehicles.
However, it noted that tokenised assets present a more credible long-term opportunity for institutional investors exploring the digital assets space.
Respondents and contributors reported expectations of future growth, driven by tokenised assets’ more familiar and operationally focused use cases such as money market funds, collateral management and private assets.
“The real opportunity in digital assets lies less so in cryptocurrencies and more in how blockchain and tokenisation can modernise existing markets,” Leon Stavrou, head of Australia and New Zealand, Northern Trust Asset Servicing, said.
“Asset owners are focused on improving liquidity, data quality and operational efficiency—particularly in private assets—rather than making wholesale changes to their investment models. As regulatory frameworks and infrastructure mature, adoption will be driven by practical use cases that solve long-standing operational challenges.”
Last month, Northern Trust stepped up its tokenisation strategy by beginning work on custody capabilities for digital assets on the Canton Network, and in March Northern Trust Asset Management launched a tokenised share class for its NIF Treasury Instruments Portfolio.
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