For pension funds, tokenization’s real play is balance-sheet management, Fidelity’s Lai says
Fidelity International strategist Lai suggests that tokenized assets offer significant efficiency gains for institutional balance-sheet management. By utilizing blockchain-based instruments, corporations can better manage liquidity and earn yields around the clock.
Why it matters
The integration of real-world assets onto blockchain ledgers represents a major shift in how global financial institutions manage capital and liquidity.
"I think over time, the more appealing use case will be balance sheet management," said Lai, a director and digital assets strategist for APAC at Fidelity International, in an interview at the WebX conference in Tokyo.
Global institutions need to hold cash in multiple bank accounts worldwide to comply with regulatory requirements, manage currency exposure and ensure they can meet demand when needed. Often, those deposits earn no return. Managing the balances and shifting them between jurisdictions in a timely manner is a challenge.
For corporations looking to maneuver their liquidity across different bank accounts, tokenized assets may be "a more efficient use case if they are able to have more 24/7 bearing instruments to manage their balance sheet."
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