Institutional Investors Embrace Tokenization: Insights from PwC Survey

The Rise of Tokenized Products in Traditional Finance

According to a recent survey by PwC reported by Foresight News, about 41% of institutional investors have expressed interest in tokenized products over the last year. This surge in interest spotlights the potential of tokenization to bridge the gap between traditional finance and digital assets.

Understanding Tokenized Products

Tokenized products encompass a variety of assets, including:

• Tokenized gold
• Tokenized real estate
• Other commodities

This development indicates a transformative shift in how assets are viewed and traded within financial markets.

Expert Insights on Tokenization

Diao Jiajun, OSL's Executive Director and Head of Regulatory Affairs, commented on the findings of the survey. He pointed out that tokenized products are positioned to play a crucial role in linking traditional financial systems with digital asset markets.

According to Diao, the preferred tokenized assets among investors will likely consist of:

• Low-volatility, high-liquidity money market funds
• Government bonds
• High-credit-rated bonds

Emergence of Tokenized Structured Products

As tokenization continues to develop, the emergence of tokenized structured products is becoming a plausible trend. These offerings are expected to provide investors with more diversified asset exposure.

The Future of Tokenization in Finance

Diao also highlighted a crucial factor in the tokenization landscape: the high distribution costs associated with these products. To counterbalance these challenges, issuers are likely to invest in improving infrastructure. This investment aims to enhance efficiency and expand market reach.

Such improvements are anticipated to foster a more attractive environment for a wider range of investors, further driving the growth of the tokenization market.

Conclusion

The interest shown by institutional investors in tokenized products marks a significant step toward integrating traditional finance with innovative digital solutions. As infrastructure continues to improve, the accessibility and appeal of tokenized products will likely expand, paving the way for their prominence in future financial landscapes.