There were signs of strengthening in the global economy during the US election on November 5. Bitcoin traded at $75,060, showing an 8.4% increase. According to an ET report, the market’s positive response appears influenced by Trump’s more favorable stance on cryptocurrencies compared to Harris. The dollar index strengthened following Trump’s initial polling results, increasing 1.25% to 104.72, measuring against six major currencies, including the euro and yen. 

The positive trend is characterized by increasing digital asset investments from institutions. They have increasingly been exploring the combination of blockchain, smart contracts, and tokenization technology to upgrade financial services infrastructure and institutional workflows. A number of sell-and-buy side institutions, including Franklin Templeton, have been leveraging their network to pursue their digital asset strategies. Institutions are drawn to the suit of enterprise-grade infrastructure and increased focus on tokenization and on-chain finance. 

Institutional Investors View Digital Assets as a Promising Class.

From venture capital and pension funds to crypto hedge funds, there is a growing consensus among institutional investors that digital assets, including cryptocurrencies, have an essential place in asset allocation. Currently, average digital asset allocations in institutional portfolios range from 1% to 5%, depending on risk appetite. According to a 2023 survey, 69% of institutional investors anticipated increasing their allocations to digital assets and/or related products in the next two to three years. They also expect digital asset holdings to constitute 7.2% of their portfolios by 2027. According to The Economist Impact, over 38% of institutional investors plan to ramp up portfolio allocations to mutual fund/exchange-traded funds (ETFs) that invest in companies tied to the blockchain/digital asset industry. 

What Are The Projects Considerations? 

Buyers usually take several important factors into account when investing in blockchain projects, including:

First, institutional buyers focus on programs prioritizing protocols demonstrating measurable improvements in processes, onboarding, and administration over traditional methods.

Second, institutional buyers tend to focus on protocols with well-thought-out strategies for integrating off-chain capital into these assets, thus expanding beyond the crypto-native liquidity pool. 

Lastly, buyers aim to carefully navigate regulatory and compliance landscapes, as many of these assets are classified as securities. 

Indonesia Is The Emerging Market for Asset Tokenizations

Indonesia’s economy has shown remarkable resilience and growth, creating a favorable backdrop for alternative investments such as : 

1. Economic Growth: Indonesia’s GDP grew 5.3% in 2023, exceeding earlier projections (Statistics Indonesia, Q1 2024 Economic Review). The World Bank forecasts growth to accelerate to 5.5% in 2024, driven by robust domestic consumption and increasing foreign investment.
2. Digital Economy Growth: Indonesia’s digital economy reached $77 billion in 2023 and is projected to grow to $130 billion by 2025, creating numerous opportunities for venture capital and private equity investments. 
3. Sandbox Regulatory Readiness: In June 2024, the Indonesian Financial Service Authority facilitated sandbox consultations for 10 prospective participants, featuring business models such as Securities Crowdfunding, carbon credits, and Earned Wage Access. Among the sandbox proposals, D3 Labs serves as the asset tokenization platform that assists major banks in Indonesia, such as BTN, in testing and developing asset tokenization use cases. 

D3 Labs Collaborates with Leading Banks in Indonesia and South East Asia for Asset Tokenization

D3 Labs is currently developing use cases for seven major Southeast Asian banks and is participating in regulatory sandboxes across two jurisdictions. D3 Labs collaborates with top-tier corporations such as BCA, BTN, Mandiri, and Pegadaian, with many ongoing deals nearing completion. The current blockchain projects encompass various applications, including REITs tokenization, tokenized deposits, cross-border transactions, tokenized gold, and more. 

During the Singapore Fintech Festival 2024, D3 Labs explored the potential demand of web3 institutional buyers. We see significant interest from leading institutional investors and venture capitalists keen to explore blockchain projects in Indonesia, particularly in asset-backed securities and fixed-income assets. This signals that Indonesia’s market is poised to embrace a decentralized economy through blockchain technology. Regulators strive to establish a robust regulatory and compliant ecosystem backed by strong collaboration among financial institutions, fintech companies, and the private sector.

Recently, D3 Labs attended the Singapore Fintech Festival to explore the potential demand on the web3 institutional buyers. The meeting successfully opened up a strong opportunity for investment in asset tokenization, with significant interest from leading institutional investors and venture capitalists. They are keen to explore various blockchain projects in Indonesia, particularly in asset-backed securities and fixed-income assets. This clearly signals that Indonesia’s market is poised to embrace a decentralized economy through blockchain technology. Regulators are actively taking strides to establish a robust regulatory and compliant ecosystem, backed by strong collaboration among financial institutions, fintech companies, and the private sector.