- A study conducted by the University of St. Gallen indicated that 48% of Swiss banks are either considering or are already involved in tokenization.
Tokenization represents more than a trend; it is poised to transform how individuals and institutions assert and validate ownership of real-world assets (RWAs). Acknowledging the expanding possibilities of distributed ledger technology (DLT), nearly half of Swiss banks are now either planning to investigate its applications or are in the process of leveraging its benefits.
Specifically, 48% of Swiss banks have either eyed tokenization or are undertaking initiatives that utilize the technology according to a survey conducted by the University of St. Gallen. This esteemed academic institution collaborated with digital optimization agency mintminds and Web3-focused firm vision&.
Nineteen banks participated as respondents in the university’s research.
Current and Future Adoption of Tokenization Initiatives
Notably, 16% of the banks surveyed acknowledged that they have prioritized the creation and deployment of tokenized assets as a “high priority.” Conversely, 32% regarded it as a “low priority” effort.
Furthermore, the survey revealed that 64% of the banks are open to adopting cryptocurrencies. To break down the statistics, 32% categorized it as a “high priority,” while the remaining 32% considered it a “low priority.”
In addition to tokenization and cryptocurrencies, 68% of the banks expressed interest in integrating blockchain for other “advanced” applications. About 16% of the respondents viewed such future applications in trade or settlement as a “high priority,” while 42% exhibited a more tepid response to such initiatives.
The survey’s authors noted a marked increase in institutional sentiment toward tokenization. Referencing the findings from the Swiss Financial Market Supervisory Authority (FINMA) last year, they reported that 34 banks and securities firms in Switzerland are already involved in activities related to crypto assets.
A majority of these institutions focused on crypto trading and custody services. Specifically, 31 operated trading platforms, while 29 provided custodial services.
Identified Challenges
The survey results projected a positive outlook for the future of tokenization in Switzerland. However, the reasons for the 53% of banks that have yet to engage with it are just as noteworthy.
More than half of the 19 banks indicated that tokenization is currently not a focus for them. Others noted that they do not perceive any substantial business benefits associated with it.
Moreover, participants opposing tokenization cited a lack of understanding, which led them to believe there was insufficient customer interest in the topic.
Additionally, 11% of the banks expressed concerns about the high costs tied to the development and implementation of tokenization projects. On the other hand, 5% highlighted the absence of secondary trading platforms and a lack of standardized practices as reasons for their hesitation to adopt the technology.
