Fund Managers acknowledge Key Benefits from Tokenisation

Expanding the target audience and improved liquidity are rated as the most important benefits from tokenisation.

More than four in five fund managers (83%) agree that they can leverage blockchain technology to grow their markets as financial services become more transparent, new global research from digital assets marketplace Token City shows.

The study, conducted among fund managers in France, Spain, Germany, Switzerland, and the UK who are responsible for around $546.5 billion in assets under management, found widespread support for the use of tokenisation from asset managers.

Tokenisation Market

The research by Token City, which provides the platform infrastructure and services for issuing, managing, and trading Security Tokens by investors, investment funds, portfolios, brokers, and other investment service companies, identified the main benefits that could be obtained from fund managers through the tokenisation of their funds and investments.

Madrid-based Token City’s research found that increased liquidity and expanding the target audience were rated as the most important benefits of tokenisation for fund managers, followed by upgraded infrastructure, reduced settlement times and lower costs for reconciliation in securities trading.

Other benefits identified during the research include advantages in asset-liability risk management and collateral management. Nearly half (45%) of fund managers strongly agree that tokenisation of assets will improve the ability to manage asset-liability risk in the future and a further 38% slightly agreed. Likewise, 82% strongly or slightly agreed that, as tokenisation expands the range of assets for collateral, it significantly expands the options available in the market and should make collateral management more efficient and transparent.

Token City says most professional fund managers who are testing the market have still very small levels of exposure to Security Tokens as they are investigating the market in terms of how it works, its infrastructure and liquidity.

However, the World Economic Forum estimates that up to 10 per cent of global GDP will be stored and transacted via DLT by 2027 – tokenized markets could potentially be worth as much as USD24 trillion by 2027, highlighting the growing momentum.

Token City founder and CEO Yael H. Oaknin said: “The tokenisation market is at an early stage of development, but it is clear that fund managers are engaging with the potential benefits and are identifying how they can make the most from the market.”

Token City supports funds and investors wanting to evaluate the market in a safe and secure way. It provides the platform infrastructure and comprehensive services required to issue, manage, and trade Security Tokens.