- A survey led by the University of St. Gallen revealed that 48% of Swiss banks are either planning or are already engaging in tokenization.
Tokenization is not just a fad, it’s about to change the way individuals and institutions would lay claim or prove ownership of a real-world asset (RWA). Recognizing the growing potential of distributed ledger technology (DLT), nearly half of Swiss banks are now either planning to explore its use cases or are already applying the advantages they have learned about it.
To be exact, 48% of Swiss banks have either set their sights on tokenization or are implementing initiatives involving the technology based on a survey made by the University of St. Gallen. The prestigious academic institution conducted the study in collaboration with digital optimizer agency mintminds and Web3-related firm vision&.
Nineteen banks participated as respondents in the university’s research.
Planned and Ongoing Adoption of Tokenization Initiatives
Interestingly, 16% of the banks covered by the poll indicated that they have placed the creation and use of tokenized assets as a “high priority.” The other 32% had it as a “low priority” endeavor.
In addition, the survey found that 64% were open about embracing cryptocurrencies. Breaking down the numbers, 32% had them as “high priority,” while the other 32% considered them as “low priority.”
Meanwhile, outside of tokenization and crypto, 68% of the banks claimed they were looking to integrate blockchain in other “advanced” uses. About 16% of the respondents saw their potential application in trade or settlement as a “high priority,” while 42% had a lukewarm reception of such an undertaking.
The survey proponents pointed out that institutional sentiment toward tokenization significantly increased. Citing the findings of the Swiss Financial Market Supervisory Authority (FINMA) last year, 34 banks and securities firms in Switzerland have already engaged in activities related to crypto assets.
A majority of them were into crypto trading and custody. Crunching down the figures, 31 operated a trading platform, while 29 offered custodial services.
Challenges Uncovered
The survey results certainly painted a bullish picture of the future of tokenization in Switzerland. However, the reasons for the other 53% that weren’t into it yet were equally concerning.
A little more than half of the 19 banks said tokenization was currently not on their priority list. Others remarked that the same does not present any viable benefit to them from a business standpoint.
Moreover, the participants who were against it cited a lack of understanding of the matter. This also led them to believe that there was a lack of customer interest in the subject.
Furthermore, 11% of the banks were concerned about the high cost associated with the development and implementation of tokenization projects. On the other hand, 5% pointed out the lack of secondary trading platforms and lack of standards as reasons for their reluctance to embrace the technology.
