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An institution may buy a fund for the exposure and returns it offers. Once that holding is available on-chain, it can also become a building block for other uses. A protocol might accept it as collateral. A curator might combine it with other assets or use it within a borrowing strategy.
That is where the conversation moves beyond issuing tokens. The opportunity is to make assets more useful, but each new use changes what the institution needs to understand. Who makes the investment decisions? When can capital be withdrawn? And does the strategy preserve the safeguards the institution expects from the underlying investment?
These questions were explored in Putting Tokenized Assets to Work: Curation and Strategy Construction at Vault Summit Singapore. The panel featured Henry Zhang, Founder and Group CEO of DigiFT; Feifei Zhang, co-founder, CFO and CIO of Anthea; Jasmine J., head of tokenisation ecosystem at Fidelity Digital Asset Management; and Ka Yan Chan, CFA, who leads digital assets for UBS in APAC. Moderated by Aravind Srinivasan, PhD, who leads GSR’s systematic OTC business, the discussion brought together perspectives from asset management, institutional allocation, banking and market infrastructure.
The following takeaways are presented without attribution under the Chatham House Rule.
The panel in 30 seconds
- Using an acceptable asset does not automatically make a strategy investable. Leverage and liquidity requirements must also fit the institution’s mandate.
- Curation can perform portfolio-management functions, but institutions still need to establish which responsibilities the curator accepts.
- On-chain efficiency needs to come with credible safeguards and operating evidence. A successful pilot alone does not establish readiness for institutional allocations.
1. Institutional investability depends on how the asset is used
An institution may be willing to hold a fund outright but not to invest in a leveraged strategy built around it. Pledging the holding as collateral, borrowing against it and reinvesting the proceeds changes the exposure the institution takes. Investability therefore depends on whether that overall exposure fits the institution’s mandate and obligations, not simply on whether the underlying fund is acceptable.
Liquidity is part of that same decision. Tokenisation can improve how a fund holding is used without changing the operating constraints of the underlying fund. A fund token may be transferable outside market hours while redemptions follow the underlying fund’s schedule. If a strategy needs cash before those redemptions can be processed, it needs another credible source of liquidity. The fund may be suitable as a holding, while the strategy’s withdrawal or financing requirements make it unsuitable for that institution.
2. A curator’s investment role needs clearly defined responsibility
Once assets are combined into a portfolio, someone has to decide what to include, how much to allocate and when to adjust the positions. These are recognisable investment-management functions. Curation can bring them across assets and protocols, making combinations available that an investor would otherwise need to assemble and manage independently.
But curation can describe different arrangements. A provider might supply software that an institution uses to manage its own portfolio. Another might select assets and make ongoing investment decisions. The institution is delegating different activities in each case, even if both providers use the same label.
That distinction determines which decisions the provider controls and what the institution must continue to oversee. Describing the service as a technology layer does not clarify who is responsible for the investment decisions it enables. The provider’s mandate and any fiduciary obligations need to be understood separately.
3. Efficiency gains do not replace institutional investment safeguards
An institution that already has access to a fund through traditional channels needs a reason to use it on-chain. More efficient settlement or collateral use may provide one. Yet those benefits do not remove the need for clear claims on assets, governance and reliable reporting. Smart contracts and wallet access introduce additional risks that also need controls.
The next question is whether the arrangements work at the intended scale. A successful pilot does not establish that a strategy can accommodate a substantial allocation, meet withdrawal terms or keep operating during disruption. Transaction records, reporting and an operating track record give institutions evidence to assess, rather than a demonstration to extrapolate from.
From available assets to institutional allocations
Using tokenised assets in financing and portfolio construction creates opportunities that holding them alone cannot provide. To attract institutional capital, builders need to explain who makes investment decisions, how liquidity works and what the operating record demonstrates. That gives institutions a basis for assessing the strategy as an investment, rather than a technical possibility.
INSTITUTIONAL ALLOCATOR GUIDE
Assess a tokenised investment with your team
Use our practical guide and editable worksheet to assess investment fit, ownership, custody and exit arrangements with your investment, risk and operations teams.
A useful reference for allocators, issuers and teams building with RWAs.
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