State Street report: Private markets likely first to get tokenised

There is a ”decisive shift” in how institutional investors are approaching digital assets, with most institutions expecting their exposure to double within three years and more than half anticipating 10 to 24 per cent of investments to be tokenised by 2030. This was the observation made by State Street in its recently published 2025 global research on digital assets and emerging technologies.

The study presented five key takeaways: digital assets are gaining ground across institutional portfolios; private markets are expected to be the first to undergo tokenisation; transparency and speed are the main benefits expected from digital asset adoption; digital asset divisions are becoming more common within businesses; and GenAI and quantum computing are seen by the industry as accelerators.

Among the institutional investors that took part in the study, nearly 60 per cent plan to increase their allocation to digital assets in the coming year. Private equities and private fixed income securities are expected to be the first asset classes to get tokenised, reflecting “a strategic focus among institutional investors on unlocking liquidity and efficiency in traditionally illiquid markets”.

Transparency, faster trading, and lower compliance costs were cited as the top three benefits of digital assets, getting 52 per cent, 39 per cent, and 32 per cent of the votes respectively. Almost half of the survey respondents believe that cost savings will exceed 40 per cent due to increased transparency.

40 per cent of institutional investors said they now have a dedicated digital assets team within their businesses, while almost a third of the respondents indicated that digital operations are now a part of their organisation’s wider transformation strategy. More than half of the respondents see GenAI and quantum computing as impactful – but mostly on investmenrt operations, not tokenisation or blockchain.

Donna Milrod, chief product officer at State Street says, “We’re seeing clients rewire their operating models around digital assets. Many are building dedicated teams, and nearly one in five plan to follow suit… The shift isn’t just technical – it’s strategic.”