Family offices and high net worth individuals (HNWI) will drive the adoption of digital assets across Asia, according to a joint report by professional services firm KPMG China and Hong Kong-based crypto asset management platform Aspen Digital.

Fast facts

The report, largely based on a survey of 30 family offices and HNWIs in Hong Kong and Singapore conducted in the second quarter of this year, revealed that 92% of respondents were interested in digital assets.

Respondents of the survey cited the high upside potential of digital assets, how digital assets have been gaining mainstream institutional attention, and the low returns of traditional financial instruments, as reasons for their interest in digital assets.

Half of all respondents were concerned about high volatility and a lack of research and valuation of digital assets, while 83% regarded the lack of regulatory clarity as a major hurdle to the wider adoption of digital assets.

The report highlighted legislative developments in Hong Kong’s financial regulations, including the June 2022 amendment to the Anti-Money Laundering and Counter-Terrorist Financing Bill that will “likely offer a more comprehensive and rigorous regime than existing regulations in Singapore, the United Kingdom and Japan,” limiting the services of virtual asset service providers to professional investors only.

Cryptocurrency exchanges were the most popular methods of digital asset investment by family offices and HNWIs, followed by cryptocurrency-focused hedge funds and direct investment in digital asset service providers.

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