Our Head of Funds, Elliot Refson, recently spoke to Global Custodians about his predictions for the funds sector in 2024:
There is an overriding trend in the real assets space towards tokenisation and, over the course of 2023, we have seen the market gear up towards this eventuality. Law firms are establishing digital funds groups, administrators are establishing digital leads or innovation committees and managers are establishing digital funds, for instance.
In 2024, we will undoubtedly start to see a pick-up in activity in this space.
There are challenges involved in embracing tokenisation. Its borderless nature, which itself provides so much opportunity, also raises questions around regulation, governance, and domiciliation. Greater access to assets for people outside of the professional investment sector will also prompt discussions about rights and responsibilities. It is a complex concept on many levels, and how the industry – managers, service providers, fund boards and domiciles – responds in 2024 will be critical.
However, the potential benefits are huge. Estimates suggest that asset tokenisation will grow into a $16 trillion business by 2030. A strong, cooperative approach from governments, regulators and industry will help minimise the risks.
From our own point of view, we see fund domiciles having an opportunity to both take advantage of the rise of tokenisation and mitigate the challenges that can arise from it.
You can read the full article on the Global Custodian’s website.