Tokenised Assets & Digital Money Could Threaten Wealth Managers' Revenue As Market Set To Hit $2.3 Trillion By 2030
New Delhi: The growing adoption of tokenised assets and digital forms of money could put pressure on a key revenue source for wealth managers, with net interest income accounting for 25-30 per cent of their total revenue, according to a report by Morgan Stanley. Also Watch: The report said the expansion of digital assets, including stablecoins and traditional financial assets represented as…
The adoption of tokenised assets and digital currencies could potentially impact the revenue of wealth managers, according to a Morgan Stanley report. Net interest income currently accounts for 25-30% of their total revenue. This is because the expansion of digital assets, such as stablecoins and traditional financial assets represented as digital tokens on blockchain networks, could change how investments are held, transferred, and used as collateral.
Wealth managers' net interest income economics may face pressure due to the emergence of digital forms of money, but opportunities to expand lending against a broader set of assets could help offset the challenge. Tokenised real-world assets are projected to grow from around USD 40 billion to approximately USD 2.3 trillion by 2030, representing traditional investments held as digital securities on blockchain networks.
While tokenisation presents risks, particularly to net interest income economics, it also offers opportunities for asset managers to develop and distribute investment products, particularly tokenised money market funds and tokenised equities. However, the benefits of tokenisation may not be uniform across financial markets, and the report cautions that expectations of significant improvements in liquidity in private markets through blockchain may be overstated in the short term.
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