Exploring the Institutional Future of Digital Assets and Blockchain

Chek Ping Chua, Executive Director (Blockchain and Digital Assets) at UOB shares his thoughts on what institutional players are looking out for in the DeFi space, and how financial institutions are positioning themselves for growth in 2025 and beyond.

How do institutional players like UOB approach partnerships with fintech firms, and what kinds of collaborations do you see as most valuable?

UOB’s core strength lies in financial services, regulatory compliance, and prudence. On the other hand, digital asset and fintech firms are faster, more agile, and quick to innovate.

Partnering with banks helps them stay compliant while building credible solutions. The key is finding the right use cases. For example, we’re particularly interested in tokenisation of real estate related products – an asset class with strong fundamentals and wide appeal. However, in Singapore, the REIT market is already efficient, so using tokenisation to do better than what we have today (e.g. providing more liquidity and access) is difficult to find, but it remains an area which UOB is exploring with SBIDM.

Recent global events have boosted gold as an asset class to consider. How do you think it might fit into the evolving digital landscape?

Gold is a unique asset class because it straddles the physical and financial worlds. Investors traditionally have two paths to consider when investing in it:

• Physical ownership – Gold is widely regarded as a safe haven asset and an enduring store of value to liquidate during emergencies. UOB is the only local bank offering physical gold products.
• Paper exposure – Financial products such as Gold Exchange-Traded Funds (ETFs) that track pricing without physical delivery. UOB has also been offering our customers the opportunity to buy and sell gold without physical delivery through the UOB Gold Savings Accounts.

That said, there has been growing interest in a third new option: tokenised gold. With digital adoption increasing, the industry is seeing younger investors turning to Web 3 platforms – rather than traditional banks – to access tokenised gold. This shift is particularly noteworthy, as gold has historically been associated with older generations and conservative investment strategies but is now attracting younger, digital-savvy investors.

We’re seeing stablecoins draw more attention globally. How do you think stablecoins will be used by institutional players and banks?

Stablecoins, when regulated and properly structured, are promising instruments for payments and settlement. If a stablecoin is backed one-to-one with fiat currency (for example, USD) and issued under sound regulatory oversight, there is no reason why banks would not participate in that ecosystem. In practice, however, few banks have indicated interest in issuing their own stablecoins, as they would mostly prefer to issue them as tokenised deposits instead. Both assets are issued using blockchain to improve payment efficiency but co-exist differently in reserve management.

Instead, we are more likely to see banks backing stablecoin issuers due to the regulatory requirement for these issuers to have banks managing reserves, offering financial services, and ensuring compliance. These are areas where UOB has a strong advantage without directly issuing stablecoins ourselves.

Historically, we have not prioritised stablecoins because regulatory frameworks worldwide were not yet mature. But recent developments such as the GENIUS Act and broader U.S. interest in stablecoin oversight have signalled change. If the U.S. sets a regulatory standard, it could trigger wider adoption globally.

Such regulatory clarity – whether in the U.S. or Singapore – could become the biggest catalyst for mainstream adoption of stablecoins and tokenised deposits, and power the broader tokenised finance industry.

What role do you see blockchain playing in modernising institutional finance, both near-term and long-term?

One area where blockchain can have a near-term impact is in security services and custodian platforms. These systems handle recording and transfer of asset ownership; a natural fit for distributed ledger technology (DLT). Money is harder to move onto blockchain because of its high transaction velocity. But for lower-velocity assets such as securities, tokenised Real-World Assets (RWAs) such as gold or even tokenised funds, a shift to DLT is more feasible.

For a longer-term impact, established institutions will need to face the challenge of finding the right balance between legacy core banking systems and the adoption of blockchain. Here is an example for illustration – banks in Singapore face penalties should unscheduled downtime for any critical system exceed four hours in a year. Therefore, overhauling core systems is a big risk and would necessitate a gradual approach which may take years.

More importantly, we should note that blockchain is only useful when multiple parties operate on the same system – it isn’t useful when deployed in isolation. For asset transfer and ownership records to be meaningful, multiple parties must operate within the same ecosystem; and that means making the commitment to coordinate together.

As UOB looks ahead, why is wealth management becoming a strategic focus, particularly in Southeast Asia?

There is strong potential in ASEAN as a wealth market with its growing middle-income class, digitally savvy population, and the significant wealth movement into the region – especially when compared to more matured, ageing economies.

We see this trend contribute to the growing number of clients coming to us with traditional needs such as opening Savings and Fixed Deposit accounts. Furthermore, with rising financial literacy, there is also increasing demand for more sophisticated investment options – stocks, bonds, even private market opportunities. However, as access to such products remain limited in this region, we have also seen more digital savvy investors turning to cryptocurrencies as an investment option. Investors should note that there is higher risk given the volatility and uncertainty around this asset class and we remind investors to always ensure that the assets in which they are investing are aligned with their risk appetite and their financial goals.

UOB has always identified Wealth Management as a growth engine long before the entry of blockchain and digital assets. We see digital assets and tokenisation as a new and innovative way to further improve how we design, manufacture and distribute wealth products, making them more accessible especially through digital channels.

But for that to scale, the industry must evolve to bring tokenised assets into regulated spaces. Without alignment from regulators and the industry moving together, such innovations remain confined to unregulated Web 3 spaces along with the value they could offer.

Such bottlenecks remain in areas such as distribution and security, but we are confident of riding on the growth momentum of digital assets.

Conclusion

From partnerships to products, wealth management strategies to system designs — the same thread runs through: Banks are entering the digital asset space thoughtfully, not disruptively – working with partners, aligning with regulators, and evolving at a calibrated pace.

The future of digital finance will be shaped not by one breakthrough, but by how well institutions modernise while preserving the customer trust they have built.