Institutional Investors “Increasingly Confident” in Digital Assets: State Street
Posted by Colin Lambert. Last updated: October 8, 2026
State Street has released findings from its 2026 Digital Assets Study, and says it shows that institutional investors are becoming increasingly confident in the long-term future of digital assets while placing greater emphasis on trust, cybersecurity, regulation and market infrastructure as adoption grows.
The global study of 300 asset managers, asset owners and wealth managers found that 51% expect digital assets to become mainstream within five years, if they have not already, up from 42% in 2025 and 11% in 2024. It adds that just 3% believe digital assets will never become mainstream.
Operational readiness is also rising. More than one-third (35%) of respondents already manage or distribute digital assets, while another 28% have the provider relationships and infrastructure in place to do so if client demand arises.
State Street says the research suggests that institutional priorities are evolving alongside adoption. Experience operating within an appropriate regulatory framework was identified as the most important characteristic of a digital asset service provider, cited by 69% of respondents. Cybersecurity ranked second at 54%, followed by financial strength at 47%.
“Five years ago, most institutions were trying to decide whether digital assets mattered,” says Angus Fletcher, head of digital asset solutions at State Street. “Today the conversation is much more practical. Investors are spending less time debating the technology and more time focused on infrastructure, operations, regulation and risk. That tells us the market is maturing.”
Respondents expect digital assets to have the greatest material impact on custody (66%), payments (54%) and fund issuance (51%). Fund issuance and tokenisation emerged as the leading strategic priority, cited by 52% of respondents. Cost reduction and efficiency were identified as the largest expected benefit of digital assets by 53% of respondents.
Faster settlement was the most frequently cited advantage (67%), followed by new client acquisition (58%) and increased liquidity (53%).
Digital cash emerged as one of the study’s most significant themes, State Street observes, adding that almost half of respondents (45%) described digital cash as very important to their digital asset strategy. Settlement of tokenised assets was identified as the leading use case (64%), while bank-issued US dollar stablecoins (49%) and tokenised deposits (48%) were identified as the preferred forms of digital cash.
“People often focus on tokenised securities, but settlement still requires a trusted form of money,” Donna Milrod, chief product officer at State Street, observes. “That is why digital cash has moved much closer to the centre of institutional strategy. The investors we surveyed increasingly see digital assets and digital cash developing together because one depends on the other.”
The survey also found that average digital asset allocations currently stand at approximately 11% and are expected to rise to 17% over the next three years, compared with 7% rising to 16% in the 2025 study. Approximately 82% of asset managers plan to distribute digital assets to institutional investors and 57% described AI as critical or very important to their digital asset operations, including applications in smart contracts, cybersecurity and data management.
Tokenisation funds are leading product development, the survey says ETFs and traditional long-only funds emerged as the preferred vehicles for digital asset distribution, with 84% planning tokenised versions of existing products.
Nearly one in five respondents believe a fully on-chain market structure will never replace today’s hybrid model of traditional and digital infrastructure, but only 24% are already using or prepared to use digital cash today, 46% expect to be able to do so within the next 12 months.
