Digital assets for next-gen treasury
Corporate treasurers must act now to harness the full potential of digital assets in their treasury operations.
Digital assets are here to stay. Regulators and institutions are now focused on their advantages as much as their risks. Well-informed and pioneering corporate treasurers are poised to benefit from what is a rapidly improving picture in terms of regulation, technology, and attitudes.
Digital assets have quickly evolved from a niche curiosity to mainstream financial instruments, propelled by accelerated rule-making from policymakers and growing institutional investor interest.
This shift marks a crucial moment for corporate treasury operations, as tokenised assets and digital currencies introduce transformative opportunities for managing liquidity, operational efficiency, and risk diversification, as well as presenting a number of challenges. Deloitte estimates users of digital assets to expand to nearly one billion and worldwide revenues from the assets to reach USD102.7 billion by 2027. With growth of this scale, understanding digital assets is now essential for corporate treasurers to remain competitive and agile.
The integration of digital assets into treasury functions promises significant benefits. They offer new avenues for portfolio diversification and potential yield enhancement through strategies such as staking, lending and liquidity provision in decentralised finance protocols. Such innovations can optimise cash management and unlock value beyond traditional treasury instruments.
There remain challenges. Treasurers must navigate a rapidly evolving regulatory environment, manage volatility risks, and implement robust governance and risk controls. Help is at hand, however, not least in the form of tech enablers, regulatory sandboxes, and sophisticated institutional partners. Now is the time to act – to make the most of this momentum and enhance the treasury’s strategic importance to the organisation.
The case for digital currencies in treasury operations
The list of digital assets is growing. Cryptocurrencies have been joined by other assets that exploit the power of distributed ledgers, such as stablecoins, central bank digital currencies and tokenised money market funds, as well as digital bonds and non-fungible tokens (NFTs).
Used appropriately, blockchain-based digital assets offer powerful advantages to corporate treasurers that include:
- Improved settlement times, especially for cross-border payments.
- Reduced intraday liquidity needs.
- Lower funding costs.
- Yield and diversification.
- Greater transparency.
Stablecoins are designed to be a form of tokenised money. They are usually backed one-for-one by a national currency, most commonly the US dollar, to achieve a level of stability that means regulators may in future be inclined to treat them as cash equivalents rather than as securities.
For corporate treasurers, stablecoins can simplify and expedite bank transfers across borders – a particular advantage for small and mid-sized enterprises (SMEs) with global operations who would otherwise face high international payments costs. Treasurers can also use stablecoins to improve their hedging and cash management practices.
The supply of stablecoins is increasing rapidly in line with strong demand, with the range of underlying currencies expanding. In Hong Kong, we are a part of an initiative that aims to issue a HKD-backed stablecoin under the licensing regime of the Hong Kong Monetary Authority (HKMA), which, in July 2024 launched, a sandbox for stablecoin issuers to explore how the technology can strengthen Hong Kong’s status as a fintech hub.
Central Bank Digital Currencies (CBDCs) take the stablecoin concept a step further. They are legal tender and carry the full faith and credit of the issuing government, eliminating counterparty risk associated with private issuers of stablecoins and potentially offering central banks a new tool for transmitting monetary policy.
CBDCs are a revolutionary idea, and one that is being approached cautiously given its potentially seismic implications for financial services. Nevertheless, corporate treasurers should watch the CBDC space closely, because feasibility studies and pilot projects are underway around the world.
Tokenisation of real-world assets: Poised for scale
Money has always been a form of token. Intrinsic value is not its purpose, and the same is true for digital currencies. Yet tokenisation is also being applied to physical goods and property. Real estate, commodities, company shares and even assets such as aircraft can be digitally securitised using blockchain-based tokens and distributed ledgers. This trend is set to transform financial markets.
Asset-based tokens serve both as proof of ownership and tradeable assets, bringing liquidity and real-time ownership verification. Fractional trading improves the liquidity of markets for real-world assets, improving the efficiency of markets and opening them up to a much wider range of investors, particularly for less accessible or illiquid markets.
In 2024, a paper by Standard Chartered and Synpulse projected that demand for such tokenised assets would reach over USD30 trillion by 2034. Of this, assets related to trade finance would represent around 16 per cent. Trade assets can be transformed into digital tokens with a traceable intrinsic value, opening-up trade finance to a much wider range of participants and helping to close the USD2.5 trillion gap in trade finance globally, one which particularly affects SMEs.
Meanwhile, tokenised MMFs (TMMFs) – which along with US treasuries make up a bulk of the roughly USD5 billion tokenised assets market (as of early 2024) – are notable for being among the first blockchain-based assets to offer a yield, making them well-suited for use as collateral.
In April 2025, together with OKX, a cryptocurrency exchange, we announced the launch of a ground-breaking collateral mirroring programme that enables financial institutions to use TMMFs and cryptocurrencies as off-exchange collateral for trading. Piloted in Dubai, our role as custodian means clients receive enhanced protection against counterparty risk, a key concern in digital asset markets as they stand.
Corporate treasurers are also looking to TMMFs as an alternative to traditional money market funds, given they bring the same advantages as other tokenised assets in terms of faster settlement times and lower costs. While an evolving regulatory picture is currently a headwind, work is underway to make TMMFs a practical option for an ever-wider group of institutional investors.
Strategic partnerships: Creating an ecosystem through collaboration
Building a flexible, robust ecosystem for digital assets is a work in progress. While their cross-border applications are powerful, scaling them will require the interoperability of disparate global networks, as well as mandatory and voluntary standards and guidelines.
Global systemically important banks, or G-SIBs, are forging partnerships to build this ecosystem, and we are a leading example. In 2021, SC Ventures, our innovation and ventures arm, and Northern Trust launched Zodia Custody, an institutional-grade custody solution designed to offer operational and technical capabilities at a grade expected by institutional clients. That same year, SC Ventures and BC Technology Group (BC Group), Asia’s leading digital asset company, announced a partnership to establish a digital asset brokerage and exchange platform for institutional and corporate clients.
In addition, Libeara, a Singapore start-up, is empowering its clients to embrace tokenisation across a variety of assets and to distribute securities via digital channels such as mobile applications and websites.
In 2024, the Bank announced its institutional digital asset custody service in the UAE, offered alongside its full range of custody and related financing, securities, and banking services for traditional assets – supported by Zodia Custody technology. More recently, together with OKX we launched a world-leading collateral mirroring programme in collaboration with Franklin Templeton to enable clients to use crypto and tokenised money market funds as collateral. The latest expansion in the Bank’s growing suite of digital asset capabilities is the launch of a fully integrated digital assets trading service for its institutional clients – supported by a strong ecosystem of partners.
The growth of this digital asset ecosystem, supported by standards, industry frameworks and cross-border collaboration, offers significant benefits to corporate treasurers by fostering interoperability, transparency, and regulatory clarity. It is enabling scalable adoption and streamlined and automated processes, accelerating transaction speeds and settlements while reducing costs and operational risks.
Practical considerations for corporate treasurers
While these initiatives are helping to forge parts of a global ecosystem, corporate treasurers should be aware that this continues to evolve at pace. And while there is collaboration among policymakers of various countries, regulations continue to be shaped in different ways.
01
Stay up to date with evolving regulation
The US, UK, Singapore and Hong Kong are focusing on a regulatory framework for stablecoins specifically, for example, while the EU’s framework is more ambitious and aims to regulate digital assets in general. Corporate treasurers seeking to take advantage of digital assets should monitor issues such as the differing licensing requirements for stablecoins and CBDCs in jurisdictions like Hong Kong and the EU.
02
Monitor regulatory priorities
DeFi, short for decentralised finance, refers to the potential for blockchain technology to disintermediate traditional banks or brokers, and is thus an important focus for regulators. Other priorities include AML and KYC, along with privacy and security. Blockchain’s transparency may not, for instance, be suitable in every instance – for example, for institutions subject to laws like the US Bank Secrecy Act. Conversely, the pseudonymity of cryptocurrencies has seen them linked to organised crime and a mounting number and scale of thefts – a reputation digital assets must avoid if they are to be widely adopted.
03
Consider how blockchain can fit into your existing workflows
Treasurers can also manage operational risk more efficiently by ensuring blockchain-based solutions are integrated seamlessly with conventional workflows. An example is Ant International’s blockchain-based Whale platform, which, enabled by Standard Chartered, allows for the transfer of SGD-denominated liquidity between its entities.
04
Prioritise use cases
The digital assets space is evolving rapidly, and treasurers might find themselves overwhelmed by potential use cases, from addressing long-standing challenges to leveraging new opportunities. Treasurers will benefit from prioritising use cases through alignment with their corporate scorecard – this could be identifying opportunities in intergroup treasury payments, to exploring blockchain collections, or ways to make faster payments in select currencies and markets.
05
Security and privacy are key concerns
When it comes to security and privacy, it’s essential to select distributed-ledger platforms with strong, built-in safeguards such as Partior. So too is keeping abreast of the latest developments around AI-driven security.
06
Human skills are required
Equally important is training staff on best practices as part of broader guidance on harnessing the full potential of digital assets technology. Partnering with trusted technology and financial providers with up-to-date knowledge of the tech, compliance and market dynamics can further strengthen your approach.
The road ahead: An opportunity to embrace a new era of Innovation
The advantages of blockchain-based tokens are so profound that, in our view, they will soon become a cornerstone of corporate treasury operations. Stablecoins and tokenisation offer fast, low-cost international transfers, while the growing number of underlying currencies and the launch of yield-bearing tokens like TMMFs and others based on real-world assets show how this technology can grow across capital market functions to aid diversification and efficiency in treasury management.
For these reasons, corporate treasurers should proactively engage with innovations in the digital-asset field as part of their continuous professional development and explore ways to adopt for their corporate treasury. Balancing innovation with rigorous risk management and smart compliance is key. Get that right, and digital assets will bring a dynamism that will drive efficiency and resilience for the treasury and uncover opportunities beyond.
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