Nickel: Support for tokenisation is building but distribution remains a concern

Nickel: Support for tokenisation is building but distribution remains a concern

July 23, 2024

Technology
Technologie (04) cyber 5g cloud

Support for tokenisation of assets and funds is building among institutional investors and wealth managers but concerns about distribution remain, new global research by London-based Nickel Digital Asset Management (Nickel), Europe’s leading regulated and award-winning, digital assets hedge fund manager shows.

The study with organisations invested in the digital assets sector found 75% expect more fund managers to look at the potential for tokenisation over the next three years with more than one in eight (13%) predicting dramatic growth.

However, concerns about distribution issues for tokenised assets were ranked as one of the top five biggest drawbacks to wider acceptance by 75% questioned with 70% highlighting reluctance to change by investors. Around 57% pointed to a lack of established service providers with 56% worrying about a lack of demand and lack of knowledge. More than half (55%) rated regulation as one of the biggest drawbacks.

Nickel’s research with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $1.7 trillion in assets found professional investors are well aware of the potential benefits of tokenisation.

Reduced settlement times were ranked as the biggest benefit ahead of the greater transparency brought by tokenisation and secondary market trading options. Investors questioned highlighted reduced costs as the fourth biggest benefit ahead of increased liquidity, enhanced risk management capabilities and the ability to offer fractional ownership of assets.

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