Banks Split on Digital Asset Entry Strategies

Major financial institutions can’t agree on how to enter the digital asset market. Some banks focus on tokenizing traditional assets while others explore tokenized deposits and issuing digital assets like stablecoins.

Samar Sen, Head of International Markets at Talos, shared insights at the Liquidity Summit 2026 in Hong Kong about how internal dynamics influence institutional decisions in the digital asset space. Sen talked about the different approaches banks are taking and why some move faster than others. The summit brought together hundreds of financial professionals trying to figure out their next moves in crypto. Sen’s company Talos has been working with institutions for years, so he’s seen pretty much every approach banks try.

Regulation drives everything.

Sen said regulatory clarity remains crucial for large-scale adoption. Global progress has reduced uncertainty, but clear regulations are still essential for institutions to move forward with confidence.

“There’s been significant advancements in regulation worldwide,” Sen said during his presentation. But he added that mature infrastructure like custody and execution platforms supports institutions, though internal hesitations still slow things down. Management teams at big banks need more time to understand the technology’s potential, according to Sen. Some executives worry about reputational risks while others fear regulatory backlash.

Trust in crypto counterparties goes way beyond just visibility. Sen talked about the importance of licensed entities and internal controls, like SOC 2 Type II certifications, for building institutional trust. These certifications show that companies have proper security controls and audit procedures in place.

Peer adoption also influences decisions big time. Institutions constantly assess who else uses the same technology before making their own moves. Sen pointed out that if you’re a big bank and see peers using the same technology, it builds trust in new partnerships. Banks don’t want to be first movers but they also don’t want to fall too far behind competitors.

Different risk tolerances shape how fast institutions adopt digital assets. Sen identified three distinct profiles among financial institutions: early movers, measured adopters, and those lagging behind everyone else.

Early movers invest ahead of regulatory certainty and build dedicated digital asset teams. These institutions hire crypto specialists and set up separate divisions to handle digital assets. Measured adopters wait for clearer regulatory guidance before making big commitments. The laggards struggle with internal coordination and can’t seem to get different departments on the same page. More on this topic: JPMorgan Boss Dimon Warns Banks Risk.

“There are many entry points to digital assets,” Sen noted. His company offers support to help institutions navigate the complex landscape regardless of where they start.

Sen also talked about collaboration between traditional financial institutions and digital asset firms during the February 26 summit. Partnerships between banks and blockchain technology providers are becoming increasingly common, he said. These collaborations aim to leverage each other’s strengths – banks bring financial expertise while digital firms offer technological innovation.

Talos has been actively engaging with various stakeholders to make transitions smoother. Sen mentioned that by working closely with regulators and establishing robust compliance frameworks, Talos wants to build a more secure environment for institutional investors. The company spends considerable resources on regulatory relationships and compliance infrastructure.

The Liquidity Summit 2026 served as a platform for heated discussions about emerging trends in digital finance. Participants debated how recent market volatility affects institutional strategies. Sen said that while price swings can scare some investors, they also create opportunities for those with long-term vision. Several attendees stressed the importance of staying flexible with investment strategies.

Risk management becomes critical as institutions explore digital assets. Sen emphasized that understanding unique risks associated with digital assets is crucial for successful integration into traditional portfolios. He urged institutions to invest heavily in education and training to better prepare their teams for upcoming challenges. Many banks underestimate the learning curve involved.

The summit highlighted the growing importance of regulatory technology in the digital asset space. Sen noted that institutions increasingly rely on advanced compliance tools to keep pace with evolving regulations. Talos is investing in RegTech solutions to enhance compliance capabilities and ensure adherence to global standards, he said. This follows earlier reporting on Crypto Expert Santos Warns Token Prices.

Discussions also covered blockchain adoption beyond financial services. Sen pointed out that supply chain management and healthcare sectors are exploring blockchain for transparency and efficiency. He cited a recent partnership between a major logistics company and a blockchain firm as evidence of this trend expanding.

Central bank digital currencies emerged as another focal point at the summit. Sen observed that several central banks are actively piloting CBDCs, which could reshape institutional strategies completely. China’s digital yuan project represents a significant development that institutions are monitoring closely, according to Sen.

Integration challenges dominated many conversations. Sen said that while technological advances have made it easier to bridge traditional and digital systems, legacy infrastructure still creates major hurdles. Many institutions face difficulties updating their systems to accommodate new asset classes, which delays adoption and integration efforts.

Regulatory development varies dramatically across regions, impacting how institutions approach digital assets. Sen mentioned that countries like Singapore and Switzerland have created favorable environments, while others lag behind. This creates a patchwork of regulations that institutions must navigate carefully.

Talos is working to address integration challenges by developing solutions for both traditional and digital ecosystems. Sen said the company collaborates with industry stakeholders to create interoperability standards that could ease transitions for institutions entering the digital asset market.

The event featured insights from other industry leaders, including panel discussions on tokenized securities potential. Participants talked about how tokenization could revolutionize capital markets by increasing access and liquidity. Sen said the potential is huge, but widespread adoption requires overcoming significant regulatory and operational hurdles first.