APAC institutions eye mainstream digital asset use

State Street's 2026 Digital Assets Study found APAC institutions are more optimistic than global peers about digital asset adoption, with stronger expectations for mainstream use and tokenisation in the region.

The study found 56% of APAC respondents expect on-chain digital asset investment to become mainstream within five years, compared with 51% globally. It also found that 32% of APAC institutions expect at least a quarter of their assets to be tokenised over the same period, versus 28% worldwide.

APAC firms also appear further advanced in preparing their operations. A third of respondents said they already manage or distribute digital assets, while 39% said they have the provider relationships and infrastructure needed to respond to client demand. The comparable global figures were 35% and 28%, respectively.

Angus Fletcher, Head of Digital Asset Solutions at State Street, said: "What stands out in APAC is the combination of growing confidence and operational readiness. Five years ago, most institutions were still deciding whether digital assets mattered. Greater regulatory guidance and clarity across the region are supporting optimism about mainstream adoption, with conversations now focused on infrastructure, operations, regulation and risk. That tells us the market is maturing."

Efficiency focus

Among APAC respondents, 55% identified cost reduction and efficiency as the main expected benefit of shifting to digital assets. Revenue growth was cited by 25%, while 20% pointed to investment returns.

They said those gains would come mainly from faster settlement, new client acquisition and increased liquidity. The findings suggest many institutions now see digital assets less as a niche product area and more as part of broader changes to market structure and post-trade processes.

Exchange-traded funds were the leading route for digital asset access and distribution in the survey. APAC led all regions in current ETF use, with 76% of respondents already using them and another 18% planning to do so.

Digital cash

The study also highlighted digital cash as an important issue for institutions in the region. Nearly half of APAC respondents, or 49%, described it as very important to their digital asset strategy.

Settlement of tokenised assets was identified as the leading use case for digital cash, cited by 64% of respondents. Bank-issued US dollar stablecoins were selected by 48%, while 47% pointed to tokenised deposits as their preferred forms of digital cash.

Fletcher outlined the role of settlement infrastructure in the next stage of market development. "People often focus on tokenised securities, but settlement still requires a trusted form of money," he said.

He added: "Digital cash preparedness currently trails broader digital asset readiness, but the institutions we surveyed are focusing on it, with most expecting to develop these capabilities within the next one to two years."

The survey also sheds light on which clients asset managers in the region are targeting as they build out digital asset offerings. Institutional investors remain the main focus, with 79% of APAC asset managers identifying them as their primary client base, compared with 45% targeting digitally native retail investors.

That emphasis reflects how far digital asset strategies in the region remain centred on established financial institutions rather than mass-market distribution. It also aligns with the survey's broader findings on custody, settlement and issuance, areas where large institutions tend to have the greatest immediate influence.

Globally, respondents said digital assets are expected to have the greatest material impact on custody, cited by 66%, followed by payments at 54% and fund issuance at 51%. Those responses point to a market increasingly focused on back-end financial plumbing as much as on investment exposure itself.

Regulation, cybersecurity, trust and market infrastructure also featured prominently as institutions assessed what is needed for wider adoption. In APAC, the combination of stronger confidence and practical readiness suggests firms are moving beyond early-stage testing, even as questions remain around standards, interoperability and risk controls.

"As digital asset markets mature, long-term success will depend not on speed, but on resilience, interoperability, compliance and trust. To capture the opportunities ahead, APAC institutional investors need to build the foundations now, with institutional-grade controls and future-ready technology ahead of large-scale allocation shifts," said Fletcher.