Crypto should adopt the best of centralization, says LMAX CEO

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"Digital money, whether it's stablecoins or tokenized assets, will ultimately enable much more efficient collateral management."

Achieving that future will require the same types of credit mechanisms that underpin traditional markets today.

Institutions are preparing

In conversations with asset managers this year, only around 20% said they expected to begin trading digital assets directly in the near term, according to Mercer. More than 40%, however, said they were actively studying onchain payments, settlements, collateral management and liquidity management.

Meanwhile, roughly 60% indicated they expect to offer digital asset-related services, while 91% said they are already engaging with stablecoins in some capacity.

"The real inflection point for digital assets won’t be bitcoin's price," he says. "It will be the emergence of a highly efficient collateral layer."

Custody remains another critical hurdle. About three-quarters of institutions Mercer speaks with continue to view secure custody infrastructure as a prerequisite before deploying significant capital.

The challenge is how digital assets become fully interoperable with existing financial systems.

"Ultimately it's about making collateral fungible," Mercer says. "If we get that right, you'll see greater efficiency across all markets, not just digital assets."

For Mercer, the end state is increasingly clear: traditional finance and digital assets converging into a single financial ecosystem, with tokenized money, interoperable collateral and institutional-grade credit infrastructure operating across both worlds.

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