Digital asset adoption at institutional level keeps stalling not at the point of trade execution, but in the tangled infrastructure that surrounds it: the governance, reconciliation, custody and compliance plumbing that every large financial firm already runs on. That is the consistent message from practitioners across trading venues, fintechs and operations teams who have tried to move digital asset pilots into production.
The Operational Gap That Kills Digital Asset Adoption
Adam Popat, chief executive of SettleMint, frames the challenge plainly. Investor eligibility checks, jurisdictional restrictions, transfer limits, holding periods and approval rights cannot live in legal documents or manual procedures that staff interpret outside the trading platform.
‘The business owns the commercial case, compliance owns the policy, operations owns the process, technology owns the environment, and security owns the control standard,’ he says. ‘Once that operating model is defined and the workflow is integrated into the institution’s existing infrastructure, the move from pilot to production becomes a delivery question rather than a governance problem.’
Sabrina Wilson, chief operating officer at GFO-X, the first UK-regulated centrally cleared venue for digital asset derivatives, authorised by the Financial Conduct Authority (FCA) in 2022, puts numbers on the problem. Reconciling on-chain activity with internal books and records, adapting legacy systems to 24/7 markets and managing private key security all create friction that teams tend to underestimate.
‘Many firms discover that operational workflows, data management, treasury processes and security require significantly more effort than the initial technology integration, making digital asset adoption as much an operating model transformation as a technology project,’ she says.
GFO-X has itself expanded that thesis beyond London, with operations now running in Hong Kong and Abu Dhabi. In September 2025, its Abu Dhabi entities received In-Principle Approval from the Financial Services Regulatory Authority of the Abu Dhabi Global Market to operate as a Recognised Investment Exchange and Recognised Clearing House for digital assets and related derivatives.
Why Off-Venue Settlement Has Become the Precondition
The structural problem underneath much of this friction is that crypto infrastructure collapsed functions that traditional finance spent decades separating. Mark Foulger, managing director of digital assets at Rostro, is blunt about how risk teams read this.
‘Execution, custody and credit all sitting with the same venue: risk teams who lived through 2008 just don’t want to touch that,’ he says. ‘Then there is the boring stuff underneath: reconciling balances across 10 different exchange logins and wallets because there’s no shared settlement layer, capital getting stuck in silos with no netting, banks still nervous about the whole sector.’
Off-venue settlement (an arrangement where assets stay with an independent custodian while only credit and entitlements move between trading venues) is the mechanism that restores that separation. Foulger argues it is now the dominant concern for institutions, ahead of spreads or venue selection.
Simon Barnby, chief marketing officer at Archax, draws the same lesson from financial history. ‘The segregation of execution, custody and credit is the market structure lesson of every major failure, from Lehman to FTX,’ he says. ‘Off-venue settlement restores that discipline. For most institutions, it isn’t a nice-to-have but the precondition their risk committees set before any capital is deployed.’
The Standard Chartered and LMAX pilot is an early live test of this model in practice. Ledger Insights reports that the pilot covered spot Bitcoin and Ether trades with T+1 settlement processed through Standard Chartered’s UK branch, with the underlying digital assets held through the bank’s custody platform in Dubai under DIFC jurisdiction. Credit and settlement functions sit under Bank of England Prudential Regulation Authority (PRA) supervision, while custody infrastructure operates in a separate jurisdiction. Standard Chartered is described as one of the first global systemically important banks to execute digital asset prime brokerage credit intermediation trades. According to Securities Finance Times, both firms are now collaborating on scalable, institutional-grade market infrastructure models informed by the pilot.
In a separate development, on 9 December 2025 Standard Chartered and GFO-X announced a partnership to allow institutional clients to use digital assets as collateral in a fully cleared model through GFO-X Abu Dhabi CCP Limited, which the firms describe as a world-first in regulated and centrally cleared digital asset derivatives.
The governance requirements that accompany all of this are demanding. Wilson argues the industry spends too much time on the technology debate and not enough on risk management. At minimum, institutions expect robust anti-money laundering and sanctions screening, travel rule compliance, real-time transaction monitoring, multi-factor authentication, segregation of duties and incident response procedures. Barnby adds that independent attestations such as SOC 2 Type 2 and ISO 27001 have become standard expectations alongside regulatory authorisation.
Popat pulls the permission question back to first principles. ‘The permission model has to define who can create an asset, approve an issuance, change a compliance rule, initiate a transfer, complete a corporate action or intervene when something fails,’ he says. ‘The same accountability has to carry through to the audit record.’
The tokenisation side of the market is wrestling with similar integration questions. On 28 April 2026, Broadridge Financial Solutions and Ondo Finance announced that holders of tokenised stocks and ETFs, including BlackRock’s iShares Core S&P 500 ETF and Micron shares issued on the Ethereum blockchain, can now participate in proxy voting through Broadridge’s ProxyVote.com platform. Broadridge reports that it tokenises more than $8 trillion in assets per month, giving a sense of the infrastructure scale already involved. Under the structure described in the Securities and Exchange Commission’s (SEC) January 2026 statement on tokenised securities, the underlying shares never leave the traditional US regulated custody chain. Ondo Finance notes that tokens are backed 1:1 by shares held by regulated custodians, with its registered transfer agent minting the corresponding tokens.
The firms moving fastest in this space treat digital assets not as a standalone silo but as a new settlement layer for existing asset classes, choosing regulated infrastructure that risk and operations teams already understand. For retail investors watching from the sidelines, the question of when institutional-grade rails are fully in place will determine how quickly regulated digital asset products reach mainstream portfolios. The Standard Chartered and GFO-X partnership closing its first cleared trades will be one date worth watching.
