Tokenised funds and crypto assets are reshaping the way institutional investors and asset managers approach investment strategies.
The latest Funds Europe Digital Assets Survey, which gathered insights from 107 respondents across the financial industry, illustrates this evolving landscape. As firms grapple with the possibilities of blockchain-driven finance, emerging trends in demand, regulation, security and infrastructure paint a clear trajectory for digital asset adoption.
One of the most significant findings from the survey – which was carried out in partnership with CACEIS, the custody bank – is the strong institutional interest in tokenisation. Asset managers who do not yet offer tokenised funds are increasingly optimistic about their future adoption, with nearly 62% expecting to launch such offerings within the next one to five years.
Demand for crypto assets is also robust, with over 42% of asset owners reporting high or very high interest from their peers. These figures highlight the growing institutional appetite for digital investments, reinforcing the notion that blockchain technology will become a foundational pillar of financial services.
Public vs private blockchains
The question of blockchain infrastructure remains critical in this transition. When asked to choose between private and public blockchains, respondents overwhelmingly favoured private blockchain networks.
More than half of respondents – 52.7% – expressed a preference for private blockchains over their public counterparts, citing greater security, governance and control.
The preference for private infrastructures signals a cautious but strategic approach to distributed ledger technology, where firms aim to leverage blockchain’s efficiencies without sacrificing institutional safeguards.
Laurent Majchrzak, Global Head Digital Assets at CACEIS, says: “While several European tokenisation initiatives have been built on private blockchains, our customers are more and more inclined to adopt public blockchains, identifying interoperability and portable custody solutions as important features for achieving their distribution strategy.
“Their objective is ultimately to allow investors access in a non-intermediated way to a maximum of financial instruments seamlessly and without additional costs.”
Despite the enthusiasm for digital assets, significant barriers remain, with regulation topping the list of concerns. More than 57% of asset owners cite regulatory constraints as a hurdle to crypto investment.
This reflects broader uncertainty around evolving financial frameworks such as the Markets in Crypto Assets Regulation (MiCA), which is expected to bring new clarity to digital asset oversight across the European Union. Until regulators establish a more comprehensive framework, hesitation among asset managers is likely to persist.
Majchrzak believes that the interplay between various EU legislative texts is sometimes a source of confusion. For instance, stable coins such as Electronic Money Tokens (EMTs) are payment means for the purpose of the settlement of transactions while also being crypto assets.
“These assets are important for asset managers if they are to implement atomic settlement with instant transactions,” he says.
“European institutions and national regulators should go public in explaining what is prevailing and take “no action decisions” to avoid conflicting and undue burden by cumulating pieces of legislation.
“In the longer term, CACEIS takes the view that the cash component should be redefined for the purpose of investment funds EU legislation by including not only EMTs but also Central Bank Digital Currencies (CBDCs) and tokenised commercial bank money.”
Security considerations are another critical factor shaping the digital asset landscape. When selecting a provider of tokenised services, financial strength and cybersecurity resilience emerged as top priorities, with 67.3% of asset owners prioritising financial stability and 63.5% focusing on cyber protections.
These concerns reflect broader anxieties over fraud, cyberattacks, and operational failures – issues that must be addressed before tokenisation can be fully embraced by institutions at scale. Investors demand robust protections, ensuring that their tokenised assets remain secure in an increasingly digital marketplace.
Blockchain-powered outsourcing
Beyond these immediate concerns, the rise of tokenisation is likely to transform outsourcing models within financial services.
Many respondents anticipate the development of specialised firms dedicated to digital asset management, leveraging automation, smart contracts, and decentralised collaboration to streamline operations.
From reducing transaction costs to enhancing cross-border settlement efficiency, blockchain-powered outsourcing is set to redefine traditional service structures. While the exact nature of these changes is still unfolding, most experts agree that the impact will be profound, shifting how financial institutions engage with asset servicing providers.
The findings of the Funds Europe Digital Assets Survey suggest that digital asset adoption is not merely a trend but a defining evolution in asset management.
Institutional demand continues to grow, private blockchains dominate infrastructure preferences, regulatory uncertainty remains a hurdle, cybersecurity is non-negotiable, and outsourcing models are set for disruption.
Majchrzak says that, with the use of Distributed-Ledger Technology (DLT) and customer demand for greater use of automated processes in the context of tokenisation, security considerations are high on the agenda of CACEIS, notably on the analysis and audit of smart contracts.
“Specific procedures and processes were adopted for the design and selection of our internal smart contracts used in the context of our tokenisation services but also when interacting with external smart contracts when receiving tokenised assets from external counterparties.”
The full findings of this research will be published later this year.
