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Digital assets are generating significant market interest. In the unregulated crypto market,  startups and early investors have enjoyed enormous value creation, while in the enterprise space, firms have taken technologies developed and tested in the crypto market and adapted it to payments and settlement, record keeping, securitization, and trading. As adoption accelerates and digital assets go mainstream across industries, there are multiple commercial opportunities for financial institutions and significant first-mover advantage to be taken.

The commercial opportunities are starting to avail themselves to traditional financial institutions, such as banks, payment companies, insurers, and fund managers. In this paper, we discuss six archetypes that will shape financial services participation in digital assets in the near future.

Six models for financial institutions to participate in the crypto market
  • Custody and Wallets: Offer licensed and regulated custodial services of digital assets to institutions and/or retail clients.
  • Trading Venues: Provide institutional-grade trading and settlement platforms of digital assets.
  • Wealth and Fund Management: Offer digital asset exposure through wealth management and fund management products for institutional and retail clients.
  • Prime Brokerage: Set up prime brokerage desk service and provide access to crypto markets for institutional traders.
  • Payments and Settlement: Provide safer and faster payment and settlement systems to banks, institutions, and merchants.
  • Innovative Financial Offerings: Develop and offer new financial offerings combining financial contracts and engineering with digital instruments.

This report was also authored by Keat Lai, Independent Consultant.