Blockchain technology has evolved from a niche topic in cryptocurrency circles to a credible force shaping how assets are managed, traded, and recorded. This blog examines which pockets of the wealth management industry have embraced blockchain, how the technology alters traditional practices, and who is leading the charge in this rapidly emerging space.

In past years, many wealth managers eyed blockchain skeptically, uncertain whether it could secure broad adoption or offer reliable returns. Today, however, shifting investor preferences, greater regulatory clarity, and maturing infrastructure have prompted forward-looking firms to experiment with decentralised solutions. In terms of market size, the blockchain in the banking and financial services market is expected to grow significantly. It is projected to increase from US$4.61 billion in 2023 to US$7.12 billion in 2024, representing a compound annual growth rate (CAGR) of 54.6%.

Global institutions like JPMorgan, Fidelity, and UBS have been among the early movers, using blockchain to enable everything from digital asset custody to tokenised bond issuances. Boutique family offices, particularly in Europe and Asia, have also embraced blockchain for managing illiquid assets, citing improved transparency and cost efficiencies.

Which pockets have adopted blockchain?

1. Private banking and custody services: Some high-net-worth (HNW) private banks now employ blockchain solutions to confiscate tokenised assets digitally. Beyond cryptocurrencies, these assets can include tokenised real estate, art, or exclusive investment products. Custodians use blockchain ledgers to enhance security and reduce manual reconciliation work.

2. Family offices and boutique wealth firms: Niche players, particularly family offices, have been early adopters. They value blockchain for seamless ownership transfers in illiquid assets (e.g., collector cars, fine art) and simplified record-keeping across multiple jurisdictions. Several small-to-mid-sised advisory firms also use blockchain-based smart contracts for automated dividend payouts and interest distributions.

3. Robo-advisors with crypto exposure: Digital-first platforms increasingly offer fractional ownership of blockchain-based assets, enabling retail clients to dip into crypto or other tokenised markets without the complexity of self-custody. These services often include real-time tracking, instant settlement, and automated rebalancing powered by blockchain infrastructure.

How does this technology change the industry?

1. Operational efficiency: Blockchain solutions can automate compliance checks, asset provenance, and corporate actions (e.g., dividends and stock splits). Wealth managers using blockchain often report fewer manual errors and faster trade settlements, leading to cost savings.
2. Enhanced transparency and trust: With real-time updates on a shared ledger, clients gain clearer visibility into asset movements. This transparency can boost investor confidence, especially in volatile markets or when dealing with alternative asset classes.
3. New investment products: Tokenisation allows fractional ownership of previously inaccessible assets, such as private equity stakes or luxury collectibles. This democratises investing, expanding the product suite for wealth managers aiming to capture diverse client segments.
4. Regulatory and compliance upside: Some regulators favor blockchain for its robust audit trails. While the landscape evolves, early adopters could see advantages in navigating anti-money laundering (AML) and know-your-customer (KYC) obligations through distributed-ledger mechanisms.

Early results and their promise
Recent pilot programs and reports by global consultancies suggest that financial firms implementing blockchain for back-office operations have cut trade settlement times by up to 50%, significantly reducing manual reconciliation errors. A 2024 Deloitte survey indicated that over 60% of surveyed financial institutions exploring blockchain saw measurable efficiency gains in areas like compliance and asset custody.

What are the platforms?

1. Ethereum and layer-2 networks. Ethereum remains the most widely adopted public blockchain for tokenising assets and building decentralised finance (DeFi) applications. However, high transaction fees have prompted many wealth managers to explore Layer-2 scaling solutions (e.g., Arbitrum, Optimism) that reduce costs and speed up transactions.
2. Enterprise blockchains (e.g., Hyperledger, Corda). Private or permissioned blockchains like Hyperledger Fabric and R3 Corda focus on enterprise-grade applications. These platforms suit established institutions that require controlled access, custom governance, and regulatory compliance features.
3. Specialised custody and tokenisation platforms. Startups like Anchorage, Fireblocks, and Securitize offer turnkey solutions for secure digital asset custody and securities tokenisation. Many wealth managers leverage these platforms via APIs or white-labeled partnerships, sidestepping the technical complexity of building blockchain infrastructure in-house.

Major incumbents such as JPMorgan and HSBC have launched pilot programs on enterprise blockchains like Quorum and R3 Corda, primarily to handle cross-border settlements and streamline internal processes. In parallel, newer fintech players often opt for public networks like Ethereum or Layer-2 platforms to rapidly build DeFi-focused services. These varied approaches highlight how established and emerging firms leverage different blockchain solutions to meet their unique needs.

Who is leading the charge?

• Global custodian banks: Institutions like BNY Mellon and State Street have launched or trialed digital custody services, focusing on securing cryptocurrencies and tokenising traditional assets.
• Big tech giants: Firms like IBM, Amazon Web Services (AWS), and Microsoft Azure are rolling out blockchain-as-a-service (BaaS) solutions to simplify deployment for large financial entities.
• Consortiums and industry groups: Initiatives such as the InterWork Alliance and Global Digital Finance are bringing together banks, asset managers, and technology vendors to set standards and foster interoperability.
• FinTech innovators: Startups exploring DeFi (e.g., Aave, Compound) have begun targeting wealth managers with institutional-grade tools, such as compliance-friendly decentralised lending platforms or stablecoin-based yield products.

How is this trend emerging?

1. Gradual regulatory progress: Regulators are moving from a reactive stance to proactive frameworks on digital assets. More precise guidelines in jurisdictions like Switzerland, Singapore, and the UAE are accelerating blockchain adoption by traditional wealth managers.
2. Mainstream investor interest: According to a 2024 Charles Schwab survey, 62% of Millennial ETF investors plan to allocate a portion of their portfolios to digital assets in the coming year. The same survey found that 44% of Gen X investors expressed interest in crypto investments, while only 15% of Boomer investors showed similar intentions. This demand is nudging more conservative firms to integrate blockchain-enabled asset classes.
3. Mergers and acquisitions: Larger incumbents are acquiring or partnering with smaller blockchain-native companies to gain a foothold. These M&A deals often center on niche capabilities like compliance solutions, off-chain data integration, or secondary market trading of tokenised assets.
4. Risk management and education: While early adopters see the potential, many remain cautious about volatility, cybersecurity threats, and evolving regulations. Wealth managers bridging this gap often invest heavily in client education, layering robust governance around blockchain interactions.

Blockchain’s wealth evolution: Game-changing steps to manage assets better
From cautious beginnings, blockchain has become a cornerstone for modern wealth management, offering tokenised assets and secure, transparent ledgers. With regulatory clarity on the rise and investor appetite surging—particularly among younger demographics—firms are now racing to implement decentralised tools. Early adopters are reaping operational efficiency and product innovation benefits, positioning themselves as frontrunners in this evolving landscape. As tokenisation expands and partnerships multiply, wealth managers who embrace blockchain stand poised to redefine industry standards.

Wealth managers exploring blockchain must leverage AI to identify tokenisation opportunities and undertake predictive risk analyses. As referred to in the “how” of Robo-Advisory, there are distinct steps for future-forward wealth management strategies.”

1. Start with pilot projects: Tokenise a small set of assets or launch limited digital offerings to gauge operational feasibility and client interest.
2. Collaborate with established tech firms: Partnering with reputable custody or tokenisation platforms can mitigate security risks and compliance challenges.
3. Educate clients: Offer transparent insights on the advantages and the risks. Workshops, webinars, and interactive demos can build trust.
4. Build regulatory intelligence: Monitor global regulatory changes to adapt strategies for cross-border transactions, tax implications, and reporting standards.