Asia's Digital Rules Drive Global Institutional Blockchain Adoption

Institutional investors are accelerating their digital asset strategies, with a majority anticipating a doubling of exposure by 2028, according to State Street's 2025 Digital Assets Outlook. The report, based on surveys of senior executives in asset management and ownership firms, reveals that over half of institutions expect their digital asset holdings to grow significantly within the next three years. This shift is driven by a combination of regulatory clarity, operational efficiency gains, and the tokenization of traditionally illiquid assets like private equity and fixed income. By 2030, respondents project 10–24% of their portfolios could be tokenized, enabling faster trading and improved transparency .

The transition is part of a broader institutional embrace of blockchain-based infrastructure. State Street's research highlights that 40% of institutions now have dedicated digital asset units, with 77% of compliance and risk leaders recognizing the need for strategic partnerships to build capabilities . Tokenization is emerging as a key enabler, allowing firms to fractionalize assets and expand access to global investors. For example, BlackRock and Franklin Templeton have already launched tokenized funds, while Hamilton Lane is tokenizing private equity offerings to attract retail capital .

Regulatory developments are playing a pivotal role in this adoption. The EU's Markets in Crypto-Assets (MiCA) framework and evolving rules in the U.S. and Asia are creating a more predictable environment for institutions. However, challenges remain: 56% of compliance leaders cite regulatory uncertainty as a barrier, underscoring the need for frameworks that balance innovation with risk management . In Asia, Singapore and China Hong Kong are leading the way. Singapore's Monetary Authority of Singapore (MAS) has introduced strict custody rules, requiring 90% of assets to be held in cold storage, while China Hong Kong's recent approval of spot Bitcoin and Ethereum ETFs has positioned it as a gateway for global capital .

Asia's role in the digital asset ecosystem is further highlighted by its adoption rates. A 2024 Consensus report found that APAC's digital asset usage is nearly three times the global average, with Thailand, the UAE, and India leading the charge. Over 60% of APAC respondents believe digital assets will transform global finance, driven by demand for financial control and alternative investment vehicles . Meanwhile, the region's regulatory momentum-exemplified by South Korea's cold storage mandates and Australia's upcoming custody framework-signals a maturing market .

Despite progress, institutional adoption faces hurdles. While 75% of financial institutions globally feel they must act to avoid falling behind, many still grapple with operational complexity and liquidity challenges in tokenized assets . However, the urgency is clear: 27% of institutions plan to expand crypto capabilities within 12 months, with 60% expecting to attract more customers through accelerated programs . As the landscape evolves, institutions that align with regulatory developments and leverage blockchain's efficiency gains are poised to capture emerging opportunities.

Source: [1] Elliptic (https://www.elliptic.co/blog/state-of-crypto-2025-financial-institutions-poised-for-digital-asset-adoption) [2] Coinbase (https://www.coinbase.com/institutional/research-insights/research/market-intelligence/2025-institutional-investor-survey) [3] Forbes (https://www.forbes.com/sites/azeemkhan/2025/05/04/why-private-equity-is-betting-on-tokenization/) [4] CoinDesk (https://www.coindesk.com/business/2025/10/09/institutional-investors-expect-tokenization-to-double-digital-asset-exposure-by-2028-state-street-says) [5] Milken Institute (https://milkeninstitute.org/content-hub/insights/global-digital-asset-adoption-asia) [6] Blockhead (https://www.blockhead.co/2024/12/04/apacs-digital-asset-adoption-nearly-three-times-global-average/) [7] Ripple (https://ripple.com/insights/3-key-digital-asset-trends-in-asia-pacific/) [8] Coinedition (https://coinedition.com/asia-investors-dollar-hong-kong-regulation/)