A Broadridge survey of North American financial services executives indicates that asset monetization is moving from the pilot phase to operational deployment. Eighty-four per cent of the institutions interviewed indicated that the technology was already a strategic focus, with most expected to have a substantial impact on financial markets over the next five years.

Decorate means that ownership of real assets such as stocks, bonds, funds or real estate is expressed in the form of digital tokens on block chains. Proponents believe that this approach helps to shorten the settlement process, lower operational costs and enhance asset fragmentation and all-weather trading capabilities.

Most institutions bet mixed structures

According to the survey, financial institutions do not generally bet “full chain”. On the contrary, 92 per cent of respondents expected that digital assets would coexist with traditional assets for the long term for the foreseeable future; 69 per cent planned to connect the monetization function to the existing system, rather than to build an entirely stand-alone chain infrastructure.

This judgement is largely in line with the drive path of large financial institutions in recent years. Most agencies prefer to connect block-chain networks to existing trading, hosting and clearing systems rather than directly replacing existing market infrastructure.

Capital market institutions move faster

Capital market companies clearly lead the way in terms of landing. Forty-four per cent of capital market institutions indicated that the relevant monetization projects had entered the production environment or were operating on a larger scale; compared with 20 per cent of asset management agencies and 9 per cent of wealth management agencies.

The survey also showed that institutions were more favourable to the first expansion of their proxy fund-type products. About 80 per cent of respondents believed that the Common Fund for Currencyization and the Monetary Market Fund would play an important role over the next five years. In contrast, only about half of the respondents expected a similar level of use for monetized shares over the same period.

The Wall Street project continues.

Over the past two years, large global financial institutions have continued to accelerate their deployment. The United States Treasury Debt Fund, launched by Belet, has become one of the larger chain investment funds; Franklin Templeton has also provided a monetization market fund. Chase Morgan expands sector-based settlement operations through the Kinexys platform, and Visa and DTCC are also building infrastructure to support monetization payments and securities processing.

The completion of the first real environment trade in tokenized securities this Wednesday shows that traditional financial markets are continuing to introduce block-chain technology into existing processes. Broadridge ' s findings also show that such actions are leading a wider industry.

  • 68% of respondents believe that monetization will at least partially reshape the financial markets in the next 3 to 5 years
  • Nearly a third of the agencies plan to increase their investments by 26 to 50 per cent or more over the next two years.
  • Regulatory uncertainty and complexity of system integration remain the most common obstacles