Institutions to double their exposure to digital assets by 2028

Institutional investors are expected to more than double their allocation to digital assets to 16% by 2028, according to a new report from State Street.

The report, produced with Oxford Economics, reveals that digital assets currently make up around 7% of institutional portfolios, with the majority of exposure concentrated in stablecoins, tokenized stocks and bonds.

State Street said the findings highlight the growing recognition of crypto as a performance driver, even as institutions remain cautious about widespread adoption. Around 27% of respondents said Bitcoin was their best performing asset, followed by Ethereum at 21%.

More than half of those surveyed expect up to a quarter of global investments to be made via digital or tokenized assets by 2030, although only 1% foresee a complete shift to on-chain, suggesting a future combining traditional and blockchain infrastructure.

“The industry is already adopting digital assets in all their cryptographic, monetary and symbolic forms, and seeing them as a growing part of wallets,” the report said. “By 2030, just over half (52%) of respondents expect between 10 and 24% of all investments to be made through digital assets or tokenized instruments.”

The study surveyed more than 300 institutional investors on how they use digital assets and emerging technologies such as blockchain and AI. She also sought to discover where these investors would allocate their capital next.

Blockchain and AI are now essential to institutional transformation strategies

Distributed ledger technology (DLT) and AI have also proven to be essential components of institutions’ digital transformation strategies.

Progress and adoption of institutions’ digital asset transformation strategy (Source: State Street)

29% of respondents cited blockchain technology as crucial, with some even revealing they were exploring DLT use cases beyond investment operations.

61% of respondents said they were considering using blockchain for cash flow management, while 60% said they were applying the technology to enterprise data processes. 31% of respondents added that they also use technology for legal or compliance purposes.

Even with the growing adoption of DLT, many companies still doubt whether blockchain-based systems will completely replace traditional commerce and custody infrastructure.

On the contrary, almost half of those surveyed believe that hybrid financial operations, decentralized and traditional, will become commonplace within five years. That’s far more than the 11% of respondents who made similar predictions a year ago.

However, 14% of respondents said it was unlikely that digital investment systems would ever completely replace current trading and custody systems. This is also a big increase from the 3% who held the same view last year.

The report comes as several institutions explore blockchain technology and launch into stablecoin infrastructure. JP Morgan, for example, launched its own stablecoin-like token called JPM.

Coinbase is leading a $2.5 billion race with Mastercard to acquire stablecoin infrastructure provider BVNK, in which Citigroup recently acquired a stake.

Happy to announce a strategic investment of @Citi Businesses.

“Stablecoins are seeing growing interest in on-chain and crypto asset transaction settlement. We were impressed with BVNK’s enterprise-grade infrastructure and proven track record.” —Arvind… pic.twitter.com/xUKlw8IetT

– BVNK (@BVNKFinance) October 9, 2025

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