State Street commissioned Oxford Economics to conduct a survey of 300 investment institutions, including asset managers, asset owners and insurers, about their approaches to digital assets and investment technology. It significantly expands on our previous research in this field, looking into organizations’ preparedness for incorporating code-based smart contracts, blockchains and other distributed ledger technologies into their investment processes, and their preparedness to hold and trade digitally tokenized versions of traditional securities.
The study examines respondents’ expectations of the overall likelihood, as well as the speed and extent of these developments. It also looks into how institutions’ day-to-day operations, workforce, organizational structures, and the existing ecosystem of financial services and technology organizations will change to adapt to these new technologies. Additionally, it assesses respondents’ views of the primary benefits of this technology, and the challenges involved in its mainstream implementation.
The results of the 2022-2023 State Street Digital Assets and Investment Study reveal that decentralized asset tokens, including tokenized versions of traditional asset classes, were the digital asset type that respondents (39 percent) felt would add the most value to their portfolios by investing directly. Cryptocurrencies were second (24 percent), followed by non-fungible tokens (16 percent). Only 9 percent of respondents preferred investment into firms providing the technology behind digital assets.
A potentially surprising 11 percent of respondents claimed to be pioneers in “using code-based smart contracts to trade tokenized versions of traditional assets on a distributed ledger/blockchain,” and nearly a quarter more (22 percent) said they were ready to do so, but had not yet. Meanwhile, 40 percent said they were not able to do this, but were putting strategies and relationships in place to do so.
The survey was fielded toward the end of 2022, and a summary of some of its results appeared in the January edition of State Street’s Digital Digest.