Why Are Asian Wealth Managers Wary of Digital Assets? -Breaking
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What is the reason Asian wealth managers are wary about digital assets?- A survey by Accenture (NYSE : ) showed that many companies have some reservations about investing with digital assets.
- The demand has increased significantly over recent years but most companies we surveyed do not intend to stock these products.
- The consulting company noted that digital assets are a source of income for $54 trillion worth of investors.
Accenture’s survey has shown that wealth managers are more cautious in offering digital assets to wealthy clients despite growing demand in Asia and the rest of the world.
The Ireland-based consultancy’s study published on Monday indicated that wealth managers are not offering cryptocurrencies, NFTs, futures, and other digital assets, because they still do not fully understand these investment options.
The crypto market has seen rapid growth since the outbreak of the pandemic. This is due in part to the massive stimuli that were injected into economies of industrialized nations. However, banks around the world have been cautious regarding this kind of investment.
Accenture reported the results of the study that have to do with strategic consulting, technology services, and Accenture’s projections on the future of Asia’s wealth management industry, according to Reuters.
According to Accenture, “Currently 52 percent of Asian affluent investor have digital assets.” Accenture has found that the number could increase to 73% by 2022, according to the company.
An Overlooked Income Opportunity
Accenture mentioned that “digital assets represent 7% of surveyed investors’ portfolios – making it the fifth-largest asset class in Asia – more than they allocate to foreign currencies, commodities or collectables.”
And it added that despite these figures still “two-thirds of wealth management companies have no plans to offer digital assets.”
Accenture’s report was based on two surveys, one to gauge the opinion of some 3,200 investors and the other to determine where wealth management companies in Asia are directing their investments. Survey participants included approximately 500 financial professionals. These studies were done between December 2021 & January 2018.
The consulting company’s results show that digital assets represent a $54 Billion revenue opportunity for wealth management companies – which most of them are not ignoring.
The Flipside
- Analysts and experts are of the opinion that the market is more than a mere situation.
- Bertrand Perez CEO Web3 Foundation predicted that the crypto bubble would burst anytime, taking 95% of blockchain and crypto projects along.
Some banks have taken the initiative.
The report explained that “among firms’ barriers to action are a lack of belief in (and understanding of) digital assets, a wait-and-see mindset, and – given that launching a digital asset proposition is operationally complex – choosing to prioritize other initiatives.”
Some banks have worked with cryptocurrency for several years in Asia. DBS Group, the biggest financial institution in Southeast Asia (OTC), launched its own cryptocurrency trading platform on December 2020.
It offers large investors and corporate clients various trading options for crypto assets.
Similar to Japanese holding companies Nomura Holdings In May, the NYSE announced that a company for digital assets was being created. This will allow institutional investors to trade in cryptocurrencies, and other operations.
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