America’s Oldest Bank Says 70% of Institutional Clients Will Invest in Crypto If This One Thing Happens

BNY Mellon, America’s oldest bank and one of the more crypto-friendly institutions, has said that 70% of institutional investors will increase their digital asset activity when more custody services are available. 

In a recent research report titled “Institutional Investing 2.0,” BNY Mellon revealed that 70% of institutional investors surveyed would “increase their digital asset activity if services like custody and execution are available from recognized, trusted institutions.” 

The report noted that institutional investors are looking for ways to get into the crypto market in a safe and compliant manner, rather than just jumping in immediately with hopes of high returns.

Furthermore, the banking giant revealed that around 90% of institutional investors are moving forward with their crypto plans despite the market downturn. “The study further indicates that almost all institutional investors (91%) are interested in investing in tokenized products.”

The report also revealed that the bulk majority (88%) of institutions are comfortable with digital representation of cash, or so-called stablecoins. However, 72% said they would like an “integrated provider for all digital asset needs.” 

The results were gathered from a survey of 271 institutional investors, traditional buy-side entities like asset owners (pension funds, sovereign wealth funds, etc.), institutional asset management firms, and hedge funds, who shared their perspectives towards investing in digital assets.

97% of Institutional Investors Favor “Tokenized” Assets

The report found that institutional investors are increasingly interested in tokenization. “97% agree that “tokenization will revolutionize asset management” and be “good for the industry,” the report highlited.

In fact, 63% of respondents said they are only comfortable trading tokenized assets with highly rated traditional institutions. The report listed removing friction from transfer of value and increasing access for mass affluent and retail investors as the benefits of tokenization.

“Every asset manager surveyed with more than $1 TN assets under management (AUM) is interested in investing in tokenized products,” the report noted. “Majority (60%) of respondents agree that they are interested but the large technology investment is an inhibitor.”

The report’s finding about increasing interest for tokenized assets is in line with a recent report by global consulting firm BCG and the digital exchange for private markets ADDX, which revealed that there is a huge market for tokenized assets as they help bring liquidity to illiquid markets. 

The BCG report claimed that the total size of tokenized assets globally is expected to grow by more than 50,000% and reach a staggering $16 trillion by 2030.