Institutional investors are moving from the testing phase to full-scale adoption of digital assets, according to new research from State Street published Thursday.
The custodian bank’s Digital Asset Outlook 2025 found that more than half of institutions surveyed expect their exposure to digital assets to double over the next three years, indicating growing comfort with blockchain-based investment tools.
The survey, which gathered input from senior executives at asset ownership and management firms, points to the tokenization of private equity and fixed income as 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, most respondents expect between 10% and 24% of their total portfolios to be tokenized. In practice, that could mean investors holding blockchain-based versions of traditionally illiquid assets, which could make them easier to trade or revalue.
Transparency and operational efficiency are driving change. More than half of respondents cited better visibility into asset data as a key benefit, while others highlighted faster dealmaking and reduced compliance costs. Nearly one in two expect cost savings of at least 40% by adopting a digital asset infrastructure.
The study also points out how emerging technologies are converging. Many respondents see generative AI and quantum computing as complementary tools that could further optimize investment operations.
State Street, which oversees $49 trillion in assets under custody, said 40% of institutions now have dedicated digital asset units. “Clients are reconfiguring their operating models around digital assets,” said Donna Milrod, the company’s chief product officer. “The change is not just technical: it is strategic.”
