Institutional investors have moved beyond the testing phase and are embarking on large-scale adoption of digital assets, according to new State Street research released Thursday.
The custodian bank’s 2025 Digital Assets Outlook study reveals that more than half of institutions surveyed expect their exposure to digital assets to double over the next three years, demonstrating growing confidence in blockchain-based investment tools.
The survey, which gathered feedback from senior executives at asset management and ownership companies, indicates that tokenization of private equity and fixed income is the most likely starting point.
Tokenization refers to the representation of assets, such as stocks and bonds, as digital tokens that can be bought, sold, and traded on blockchains.
By 2030, a majority of respondents expect between 10% and 24% of their total portfolio to be tokenized. In practice, this could mean investors holding blockchain-based versions of traditionally illiquid assets, which could make it easier to trade or revalue them.
Transparency and operational efficiency are the drivers of change. More than half of respondents cited improved visibility of asset data as a key benefit, while others highlighted faster transactions and reduced compliance costs. Nearly one in two people expect savings of at least 40% from adopting digital asset infrastructure.
The study also highlights how emerging technologies are converging. Many respondents see generative AI and quantum computing as complementary tools that can further streamline investment operations.
State Street, which oversees $49 trillion in assets under custody, said 40% of institutions now have units dedicated to digital assets. “Customers are rethinking their operating models around digital assets,” said Donna Milrod, the company’s chief product officer. “Change is not just technical, it is strategic.”
