Institutional Crypto Users in Asia Seek 40% More Exposure: Report

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Institutional demand for cryptocurrency and digital assets is on the rise, particularly among Asian investors. A recent survey conducted by SBI Digital Assets Holdings, a subsidiary of Japan’s SBI Holdings, reveals that nearly 60% of institutional investors in Asia have ventured into digital assets over the past year. 

This trend reflects a growing recognition of the potential of digital assets in diversifying investment portfolios.

Asia Wants Crypto

The survey highlights a strong future interest in digital assets, with nearly 40% of respondents planning to increase their exposure in 2024. 

An additional 25% indicated they were considering significant increases in their digital asset investments. Only a small fraction, 15%, expressed no intention to invest or transact in digital assets.

CBDCs to See the Highest Adoption

Cryptocurrencies remain the primary area of interest, with 67% of institutions currently involved in some form of cryptocurrency investment. However, there is a growing belief that central bank digital currencies (CBDCs) will see the highest adoption within the next three years in Asia, a sentiment shared by 33% of respondents.

Tokenization of real-world assets is also gaining traction among institutional investors. Approximately 62% reported client demand for tokenized securities, highlighting the appeal of this innovative investment approach. 

When asked which assets they prioritize for tokenization, 40% of institutions chose real estate, followed by funds and physical infrastructure at 14% each, bonds and collectibles at 10%, and the remaining interest split between equities and precious metals.

Tokenization of RWAs

The benefits of tokenizing real-world assets are clear to these investors. Nearly half of the participants cited reduced intermediaries as the primary advantage, followed by faster settlement, cost efficiency, enhanced transparency, and increased liquidity. 

These factors collectively underscore the potential of tokenization to streamline and enhance the efficiency of financial transactions.

Factors Affecting Adoption in Asia

Despite the enthusiasm, there are significant barriers to adoption in Asia. The primary obstacle, identified by 60% of respondents, is the lack of a trusted ecosystem to facilitate end-to-end transactions. 

This concern points to the need for more robust and reliable infrastructure to support the growing interest in digital assets. Cybersecurity threats were considered a major issue by 20% of institutions, while 18% pointed to the lack of regulatory clarity as a significant challenge.

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