Schroders has acquired a minority position in the New York-based cryptocurrency business Forteus to research the blockchain industry.
Schroders said in the agreement that Forteus, the fund management arm of the Swiss-based Numeus Group, would be entrusted with supplying various investment solutions such as yield generation, managing themed portfolios, and tokenisation, as reported by Institutional Asset Manager on July 25.
While developing its tokenisation approach, the firm said it intends to use the advantages that blockchain may provide the asset management sector.
The role of blockchain in asset management
According to CEO Peter Harrison, Schroders’ foray into blockchain technology is motivated by the technology’s promise. As stated by Harrison:
It can alter the efficiency of current solutions and will push the democratisation of private assets; it is a new frontier of technology and financial innovation.
The investment comes when the crypto industry faces a persistent bear market in which most assets have lost considerable value and associated firms are battling to survive. Notably, the correction has occurred under monetary policy tightening by central banks to contain inflation’s meteoric rise.
Lessons from the blockchain industry
Harrison said in a recent remark that the drop in cryptocurrency values should not be of worry but that the market should instead concentrate on the technology behind digital assets.
He added that the conventional banking sector must learn from the cryptocurrency business, emphasising that the industry has managed to advertise itself despite regulatory hurdles and excessive volatility.
Ironically, blockchain, the underlying technology of cryptocurrencies, might catalyse change in the conventional investing business.
Several crypto firms, including the loan platform Celsius, have filed for bankruptcy due to the market crash because they could not maintain their operation due to liquidity concerns.