By using the AI-powered Reply Sonar platform we created an overview of relevant trends related to digital assets.
Digital assets in financial institutions: looking forward 2024
An overview of the current state of the market regarding digital assets to understand the actions taken by major global financial institutions and the new opportunities.
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#Digital Assets Products
#Financial Institutions
#Tokenomics
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A comprehensive analysis
of 50 key financial entities
Reply’s detailed analysis of major global financial institutions, sorted by their Assets Under Management, indicates approximately 40% are exploring services related to digital assets. Notably, European institutions demonstrate a 56% engagement rate in the digital asset market, significantly surpassing North American entities at 28%, and outpacing other global regions.
Approaches for the market launch of Digital Assets products
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Evolving regulatory environment for digital assets
Due to the growing interest in digital assets and related services, regulators have been compelled to a global effort to establish clear objectives and solid legal frameworks aimed at preserving market integrity, ensuring investor protection, and promoting legal certainty for market participants. The overarching goal is to create a harmonized and consistent regulatory framework at an international level, acknowledging the need for coordinated regulatory approaches to manage the novel challenges posed by these digital innovations.
Key players in the digital assets arena
Traditionally, the primary revenue source for digital asset operators has been transaction fees, constituting over 65% of their income until 2022. These operators are diversifying revenue streams by developing other services such as custody fees, earning interest on stablecoins, staking rewards, and subscriptions for additional services like enhanced support and tax assistance. The strategic importance of Tokenomics in generating revenue and building reserves is also gaining recognition.
However, the industry has recently experienced challenges, highlighted by significant declines in cryptocurrency, NFT, and stablecoin values. This downturn has led to an emphasis on cost optimization and operational efficiency, evident in workforce reductions among top operators. These entities are also tasked with rebuilding trust within the international financial community and investors, particularly in light of previous failures, regulatory scrutiny, and perceived transparency issues.
How Reply assists financial institutions in digital asset integration
Reply supports financial institutions in harnessing digital assets by adopting an end-to-end approach. This involves tailoring business and service models to the digital asset ecosystem, which includes defining technical and business requirements for existing platforms, sharing global product know-how, and implementing IT solutions. We facilitate the exploration of this ecosystem by analyzing specialized players' business models, identifying synergies, and integrating systems between financial institutions and specialized services, all within regulatory guidelines. Delve deeper into the topic by downloading our report.