The past couple of years have marked a step change in the digital assets landscape, with the financial services industry moving from proof of concept and experimentation to increasing integration into mainstream financial infrastructure – see the flow article ‘Ready for take-off: scaling digital assets’.

Digital assets – assets created, recorded, stored or transferred electronically using distributed ledger technology (DLT) or blockchain – can broadly be categorised in three forms:

• ‘Decentralised’ crypto-assets (such as Bitcoin and Ethereum).
• Tokenised money, including stablecoins (digital representations of fiat currency issued on public blockchains); tokenised deposits (on-chain representations of commercial bank deposits); and wholesale central bank digital currencies, or CBDCs, (tokenised central bank money designed for use between financial institutions); and retail CBDCs (digital forms of a sovereign currency, issued by a central bank for use by the general public).
• Traditional assets such as equities, government bonds, corporate credit or real-estate converted into/represented as digital tokens on blockchain, often known as ‘tokenised real-world assets’.¹

While crypto-assets have long been used by investors to diversify portfolios, tokenised money forms such as stablecoins are now gaining traction as credible tools for payments, treasury/liquidity management and settlement, while tokenised real-world assets have the potential to reshape issuance, settlement and collateral management across capital markets.

While these three forms differ in characteristics and use cases, they have two things in common: Firstly, they are demonstrating how blockchain and DLT can enhance the speed, efficiency and provide programmability of financial transactions. Secondly, they require foundational infrastructure, such as digital asset custody solutions, to scale; paving the way for digital assets to be more widely adopted.

This article explores how tokenised money and tokenised real-world assets are being used in practice, examines the forces driving their adoption, and considers how banks are responding as digital assets move further into the financial mainstream.

According to Boston Consulting Group’s (BCG’s) The Future of Digital Assets report (May 2026), tokenised assets currently represent a relatively small market worth around US$60bn. However, the report forecasts that, in a strong-growth scenario, tokenisation could account for approximately 16% of global investable assets by 2035, equivalent to a market value of US$88trn – see Figure 1.²

Figure 1: Digital real-world assets: predicted market growth
Source: BCG analysis, The Future of Digital Assets, May 2026

This is supported by the EY-Parthenon and Coinbase Institutional investor digital assets survey, published in March 2026, which highlights that institutional investor interest is “moving beyond exploratory pilots and toward more deliberate portfolio and platform decisions”.³ Of the survey respondents, 73% plan to increase allocations in 2026 (see Figure 2).

Figure 2: Institutional investors plan to increase digital assets allocation in 2026
Source: EY-Parthenon and Coinbase survey, Institutional investor digital assets survey, March 2026

The potential liquidity benefits for financial institutions (FIs) if tokenised assets take off are substantial. Tokenisation has the potential to make collateral, cash and securities more mobile, programmable and efficient. By enabling near real-time settlement and faster collateral mobilisation, it could unlock capital currently tied up in post-trade processes and help institutions optimise liquidity. Sabih Behzad, Head of Digital Assets and Currencies Transformation at Deutsche Bank, identifies intraday repo, where securities can be pledged, financed and returned within the same day through instant settlement, as one “particularly promising” use case.

These potential benefits are increasingly being quantified. A report published by the Global Financial Markets Association in August 2025⁴ highlights how DLT could generate efficiencies across the trade lifecycle in capital markets. According to the report, a global bank handling US$100bn in daily repo volumes could achieve US$150–300m in savings by reducing idle collateral and achieving faster settlement.

Realising these benefits at scale, however, will depend on more than the tokenisation of individual assets. The International Organization of Securities Commissions’ Final Report on the Tokenization of Financial Assets, published in November 2025, identified interoperability challenges and post-trade fragmentation as key barriers to tokenised asset adoption.⁵

This is why tokenised issuance initiatives being pursued by international central securities depositories (CSDs) are so significant. In the US, the Depository Trust & Clearing Corporation is developing a tokenisation service for highly liquid assets – including the Russell 1000, alongside ETFs tracking major indices and US Treasury bills, bonds and notes – which is expected to go live in October 2026.⁶

In Europe, Clearstream launched a tokenised securities platform that’s fully compliant with the EU’s Central Securities Depositories Regulation in November 2025, “providing clients with the choice between digital and tokenised issuance”.⁷

Clear cross-industry momentum is now behind digital assets, with global banks, fintechs, regulators and CSDs moving in unison. This is enabled by recent regulatory developments, which have provided greater clarity for FIs.

In Europe, the Markets in Crypto-Assets Regulation (MiCA), which entered into force in June 2023,⁸ has introduced a harmonised EU regime for crypto-assets that fall outside existing financial services legislation, replacing a patchwork of national licensing and anti-money laundering registration requirements. In the US the GENIUS act,⁹ which establishes rules for payment stablecoins, will come into force from January 2027, while the CLARITY act¹⁰ would create a broader legal framework for a wider range of digital assets, if it receives Senate approval.

As BCG notes, regulation and banks’ technological infrastructure are seeing strong momentum (see Figure 3). However, interoperability and customer adoption remain key barriers to scaling digital assets.

Figure 3: Four key conditions required for digital assets to scale
Source: BCG analysis, The Future of Digital Assets, May 2026

A lack of interoperability and customer adoption are also true for stablecoins. Although they are one of the forms of tokenised money gaining the most traction, their use in payments is still in its infancy. According to BCG’s white paper, Stablecoin payments – the truth behind the numbers,¹¹ less than 1% of the overall stablecoin transaction volume in 2025 corresponded to real-economy payments.

While their wallet-to-wallet infrastructure and broad accessibility stablecoins make them well-suited to moving value quickly across networks and borders, they are generally not yield-bearing. As a result, FIs and corporate treasurers have limited incentive to hold significant balances in them over time, creating a need for funds either to be ‘off-ramped’ back into fiat currency or exchanged into yield-bearing alternatives. This has helped fuel interest in alternatives such as tokenised deposits and tokenised money-market funds, which combine benefits including programmability, faster settlement and round-the-clock availability with exposure to yield-bearing instruments. As a result, both are attracting growing attention from banks, asset managers and corporate treasurers as the digital money ecosystem matures.

To scale stablecoin adoption in payments, corporates will increasingly need to rely on banking-grade infrastructure that integrates stablecoins into existing treasury, compliance and payments processes as an additional payment rail.

PayPal is among the corporates assessing stablecoins as a new payment rail. In 2025, the company’s treasury team carried out one of its first intercompany settlement pilots using PayPal’s proprietary stablecoin, processing more than US$1bn across three continents. A dividend repatriation from Singapore to the US, which would typically take days to settle, was completed in a matter of hours.

Can Balcioglu, Group Treasurer at PayPal, told flow the pilot “demonstrated that stablecoins could complement existing payment rails in the future as they allow for a faster, more transparent and cost-efficient alternative to traditional banking rails”.

Deutsche Bank’s Behzad notes that while wider adoption of stablecoins and other forms of tokenised money in corporate treasury will take time, “the direction of travel is clear as corporates increasingly look to move from speculative to real use cases across cross-border payments, FX transactions, and liquidity management”.

Ultimately, institutional scale rests on the strength of the underlying infrastructure. Robust custody provides the security, governance and regulatory safeguards needed to support greater participation and capital allocation from institutional investors, banks and asset managers.

The EY-Parthenon and Coinbase survey highlights that custody security and regulatory compliance are key concerns for institutional investors in 2026, with 81% preferring regulated investment vehicles when gaining digital asset exposure.¹² As the report states: “Put simply, institutions are not just asking ‘who can custody?’, but ‘who can custody under scrutiny?’”

Paul Maley, Global Head of Trust and Securities Services at Deutsche Bank, highlights the foundational role that custodians will play in this new ecosystem: “The future of digital assets will be built on trusted infrastructure. As adoption accelerates, custodians will continue to provide the trust, security and post-trade capabilities that enable institutions to participate with confidence and support digital assets at scale.”

“The future of digital assets will be built on trusted infrastructure”
Paul Maley, Global Head of Trust and Securities Services, Deutsche Bank

This momentum is already visible in Europe. The European Securities and Markets Authority’s interim MiCA register shows that almost 200 European crypto-asset service providers are authorised to provide custody and administration of crypto-assets, including stablecoins, on behalf of clients. This number is set to rise as traditional custodians continue to join cryptocurrency exchanges and specialist digital asset firms in the market.¹³

The expansion of the digital assets ecosystem brings significant opportunities, but also heightens the importance of security. According to blockchain intelligence and data analytics company TRM Labs, the number of crypto attacks hit a record high in the first half of 2026 with 207 hacking incidents,¹⁴ comprising both large-scale infrastructure compromises (which tend to be small in number, but account for the majority of losses) alongside a growing number of ‘smart contract exploits’ – whereby attackers exploit blockchain vulnerabilities – targeting decentralised finance protocols, decentralised exchanges, and token projects.

The conditions that drove the record losses seen in the crypto industry in 2025 remain firmly in place. Blockchain analytics company Elliptic notes that threat actors are increasingly exploiting “fragmented blockchain infrastructure” to obscure the flow of stolen funds.¹⁵ The firm believes that, to date, US$21.8bn in illicit and high-risk crypto has been laundered using cross-chain methods including decentralised exchanges, cross-chain bridges or no-KYC coin swap services. These findings illustrate the increasingly complex threat environment surrounding digital assets. Against this backdrop, Maley adds: “Custodian banks with institutional-grade security frameworks and infrastructure have an important role to play in safeguarding private cryptographic keys, which establish ownership and control of digital assets.”

To protect these assets, custodians typically employ multiple layers of defence, including secure key generation, hardware-based key protection, key fragmentation, multi-person transfer authorisation, and segregated storage environments. This can include cold storage, where private keys are held entirely offline to minimise cyber risk, alongside robust backup and recovery mechanisms designed to ensure resilience and business continuity.

Beyond security, safekeeping and regulatory compliance, custodian banks and other authorised FIs increasingly provide integrated services spanning both traditional and digital assets. This enables institutional investors, corporates and other financial market participants to access digital asset markets through established banking relationships, operating models and risk frameworks, rather than relying solely on specialist crypto-native providers.

As digital assets become more closely integrated into securities issuance, collateral management, payments, and treasury operations, this convergence between traditional and digital asset infrastructure is expected to become more pronounced.

Custodians also play a key role in the broader digital asset value chain, providing many of the operational capabilities needed to support institutional adoption, including settlement, reconciliation, reporting, asset servicing and connectivity between traditional financial market infrastructure and digital asset networks. According to Maley, “these capabilities help institutions incorporate digital assets into existing workflows while maintaining established standards of governance, control and oversight”.

“Trusted financial institutions will play a critical role in bridging traditional and digital markets”
Gerald Podobnik, Co-Head of Deutsche Bank Corporate Bank

Gerald Podobnik, Co-Head of Deutsche Bank Corporate Bank, is clear that digital assets have the potential to reshape how value moves through the global financial system in a future world where atomic settlement of both payments and securities is not just a possibility, but a reality. However, he stresses that integrating digital assets effectively will require extensive cross-industry collaboration.

“Realising this potential will depend on trusted financial market infrastructures, including custodians, banks and marketplaces, providing the security, governance and connectivity needed to support institutional adoption at scale,” he says. “As the ecosystem matures, these institutions will play a critical role in bridging traditional and digital markets, helping clients access new opportunities with the confidence, resilience and regulatory certainty they expect.”

Sources

¹ For a definition of digital money, including public central bank digital currencies (CBDCs) and tokenised deposits, see our May 2026 white paper, Digital Money – a perspective on stablecoins, tokenised deposits, and CBDCs at flow.db.com
² See The Future of Digital Assets at bcg.com
³ See Institutional investor digital assets survey at ey.com
⁴ See The Impact of Distributed Ledger Technology in Capital Markets at gfma.org
⁵ See IOSCO publishes Final Report on Financial Asset Tokenization at iosco.org
⁶ See Tokenization: From Experimentation to Production at dtcc.com
⁷ See D7 DLT: Clearstream Launches Tokenized Securities Platform at clearstream.com
⁸ See Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (Text with EEA relevance) at eur-lex.europa.eu
⁹ See S.1582 - GENIUS Act at congress.gov
¹⁰ See H.R.3633 - Digital Asset Market Clarity Act at congress.gov
¹¹ See Stablecoin Payments at bcg.com
¹² See Institutional investor digital assets survey at ey.com
¹³ See Markets in Crypto-Assets Regulation (MiCA) at esma.europa.eu
¹⁴ See H1 2026 Crypto Hacks Reach Record High as Losses Fall Below USD 1 Billion at trmlabs.com
¹⁵ See The state of cross-chain crime 2025 at elliptic.co