Institutional participation in digital assets has accelerated over the past 18 months, driven by stablecoin settlement, real-world-asset (RWA) and tokenisation pilots, and renewed engagement from major asset managers. Early adopters began experimenting with digital assets in 2021, but the market downturn slowed progress, according to Lily King, chief operating officer of Cobo — an institutional digital-asset custody and wallet-infrastructure provider originally founded by two Chinese entrepreneurs in 2017 before relocating to Singapore and Hong Kong. King said the recent resurgence is different: institutions are now prioritising utility — payment, settlement and lifecycle management — over speculative exposure to cryptocurrencies and early-stage tokens. Much of this activity, she noted, relates to tokenised RWAs, including private credit, funds and cash-management instruments. Speaking on the sidelines of the Singapore FinTech Festival 2025, King outlined why custody is becoming the anchor for institutional tokenisation, how governance and workflow design now matter more than technology alone, and why regulatory divergence across Asia is shaping wallet architecture and operational controls. Custody and wallets as the foundation Cobo offers institutional-grade custody for asset managers, trading firms and enterprises. Its client base is primarily in Asia, with selective clients in Latin America and Africa, and includes exchanges, listed companies and tokenisation-focused asset managers. Recent partnerships include Transak, a global payments provider which uses Cobo’s wallet infrastructure, and Vantage Markets. The company says it serves more than 500 institutional clients globally and safeguards billions of dollars in digital assets. King also noted that Cobo supports two of the world’s largest asset managers. The firm operates across Singapore and Hong Kong — it holds a Hong Kong TCSP licence and is progressing through its licensing route in Singapore and the Middle East, with further approvals expected next year. Its custody platform is also backed by SOC 2 Type 2 and ISO 27001 certifications, which King said are increasingly required in institutional due-diligence processes. King stressed that many institutions still misunderstand what custody entails. “Custody is sometimes considered the equivalent of a bank account for digital assets, but it’s totally different,” she said. She explained that custody and wallets function together: the wallet is the tool through which an institution actually accesses, signs for and interacts with digital-asset applications, while custody provides the governance, safeguards and operational controls around that wallet. As she put it, “the wallet is the gateway. Without a wallet, institutions do not actually interact with digital assets.” A recurring challenge, King noted, is a mismatch between expectation and reality when it comes to digital-asset wallets. “[Institutions] expect to see online-bank-app kind of user-friendly apps, but actually it’s not there yet.” Custody providers must abstract underlying blockchain complexity, while institutions need to “understand that wallets are part of a broader workflow — not a simple account interface.” Differentiation now lies in governance, not raw technology Institutional custody has become an increasingly competitive space, with global custodians, regional specialists and bank-led ventures all expanding their digital-asset capabilities. King said the point of differentiation is shifting away from technical key-management features toward governance, workflow integration and control frameworks — the areas that determine whether institutions can operationalise tokenisation at scale. According to King, Cobo integrates various wallet architectures within a single platform, allowing institutions to align different control models to different business functions. The company positions this as a unified wallet platform — all accessible through one API stack, a capability Cobo refers to as Wallet-as-a-Service (WaaS). Among these architectures, custodial wallets—where Cobo manages the private keys—support regulated safeguarding requirements and statutory segregation rules in markets such as Singapore and Hong Kong. Programmable smart-contract wallets underpin tokenisation workflows, enabling issuance, redemption and lifecycle events with embedded compliance logic and transfer restrictions. Multi-party computation (MPC) governance wallets distribute signing authority across multiple internal teams — legal, compliance, treasury and trading — providing multi-party authorisation and role-based delegation that mirror existing corporate approval chains. King noted that MPC has increasingly become a default choice for many institutions because its shared-signing model aligns naturally with how regulated firms already distribute authority and operational controls. “Different wallets work for different purposes,” King said. “Bringing them together in one platform lets institutions maintain clear segregation of duties across jurisdictions.” She emphasised that as tokenisation moves from pilots to real operations, the critical requirements are increasingly governance controls, policy enforcement and workflow orchestration — not technology in isolation. The integration gap between middleware and application King highlighted a persistent gap between the blockchain-infrastructure layer and the application layer where regulated workflows live. Institutions often underestimate what it takes to integrate digital-asset flows into existing legal, compliance and operational processes. “Most issuers even have no wallets,” she said. Many early tokenisation pilots, she added, are not fully on-chain: “You cannot see any on-chain data because everything is whitelisted with no transferability — only issuance and redemption.” In these pilots, tokens can only be held by a small set of approved participants and cannot be moved between them, making the exercises demonstrations of basic feasibility rather than functional, transferable tokenised assets. She views this as a transitional phase. Proofs of concept demonstrate feasibility, but production deployment requires clearer governance models, more mature middleware and better operational interfaces. Regulation in Asia: complementary but divergent Across Asia, King sees Singapore and Hong Kong as “very different but complementary” in their digital-asset strategies. Singapore has taken a supervisory-led, risk-managed approach under the Payment Services Act, with clear safeguarding, capital and governance requirements for custody. Hong Kong has moved more quickly to open its market, with regulated custody under TCSP and virtual-asset frameworks emphasising oversight, segregated accounts and fit-and-proper standards. While the structures differ, both converge on strong governance and operational transparency, which King said are essential as custody becomes the structural backbone of institutional tokenisation workflows. “Crypto is naturally global,” she said. “You need to deal with the fragmentation of regulation.” Cobo implements a comprehensive AML/CFT framework that integrates KYC, sanctions screening, transaction-monitoring and KYT controls directly into its custody stack to provide consistency across markets. The firm claims to have a zero-incident security record since its inception. From pilots to production King expects the next phase of institutional adoption to shift from proofs of concept to real deployment. This will require clearer supervisory guidance, more intuitive wallet interfaces, deeper integration with existing operational systems and robust governance and compliance tooling embedded directly into custody platforms. The next phase of digital-asset adoption will redefine institutional architecture. With banks moving from proofs of concept to fully tokenised workflows, custody platforms will evolve into orchestration engines that embed governance, compliance and multi-wallet coordination at the core of institutional operations. As asset tokenisation strategies mature, she believes custody — and the governance encoded within it — will define the long-term architecture for institutional digital-asset systems. With its multi-wallet platform and cross-jurisdictional compliance framework, Cobo is positioning itself to play a larger role in Asia’s institutional digital-asset ecosystem.
