Challenges loom for asset managers embracing tokenisation
29% of asset managers said they were set to offer tokenised funds within the next one to five years, while over half said they would do so in the next decade.
Following the approval for UK funds to begin tokenisation last week (24 November), many asset managers remain cautious about the new technology, the survey from the Investment Association and financial software specialist Bravura revealed.
UK funds given approval to begin tokenisation efforts
Despite this, 29% of asset managers said they were set to offer tokenised funds within the next one to five years, while over half said they would do so in the next decade.
«This figure is likely to rise following the confirmation last week from the FCA that there are no significant regulatory barriers to adoption in the context of industry's blueprint model for tokenisation,» the Investment Association added.
The survey, conducted between September and October among managers representing nearly half the industry's AUM, found that 85% of respondents believed a lack of effective industry collaboration is the biggest barrier for adoption of the new technology.
Other hurdles included a lack of effective regulation (79%) and wider uncertainty and prioritising other projects (50%).
Meanwhile, the survey found that respondents believed the biggest boon from tokenisation was improving trading, settlement and liquidity.
Other benefits cited by asset managers included lowering costs, simplifying processes and providing greater flexibility to create financial products.
Deep Dive: Tokenisation represents 'paradigm shift' for asset management
John Allan, head of innovation and operations unit at the Investment Association, said: «The potential of digital assets and its associated
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