Governance and client confidence top barriers to digital asset adoption

New global research reveals a striking disconnect between perceived and actual barriers to institutional adoption of digital assets, suggesting the real challenge lies within firms – not just in the regulatory environment.

According to Brava Finance’s study of 200 institutional investors and wealth managers, regulatory uncertainty is still recognised as the single greatest barrier to developing a digital asset allocation strategy.

However, when asked what would actually encourage them to increase allocations, only 23% said clearer regulation would make the difference.

Instead, industry concern is shifting towards operational readiness, governance, and confidence in managing client expectations.

Key internal obstacles identified:

• Governance and investment committee sign-off – seen as the biggest practical hurdle to implementing a digital allocation increasingly treated like any other alternative asset.
  • Ability to explain risk and performance to clients – especially around volatility, liquidity, and the distinction between speculative crypto and institutional-grade stablecoin strategies.
  • Operational capability – including risk frameworks, custody oversight, portfolio reporting and valuation controls.
  • Reputational risk – particularly around client losses or misaligned expectations.

Interestingly, investors are less worried about volatility and peer benchmarking than they are about being criticised by trustees or clients for adopting digital assets too early or poorly communicating downside risks.

Graham Cooke, CEO of Brava Finance, said institutional sentiment is becoming more nuanced: “The main barriers are not simply that digital assets are viewed as risky or unregulated. The issue is that many firms don’t yet feel operationally or culturally ready to integrate them into portfolios, explain them effectively to clients, or manage them with institutional discipline.”

What this means for advisers, platforms and DFMs

• Early interest is being driven not by regulation but by client demand, diversification objectives and institutional signalling.
  • Firms will increasingly need education, governance tools and template disclosures to integrate digital allocations responsibly.
  • Advisers are likely to play a crucial role in helping clients understand the difference between speculative crypto, tokenised funds, and institutional-grade stablecoin credit strategies.
  • The real turning point may not be regulatory approval – but when digital allocation feels operationally no different from alternative credit, infrastructure or private markets.

What would improve confidence most? Beyond regulatory clarity, respondents said they would increase allocations if:

This suggests that digital adoption will accelerate when managers can demonstrate institutional-grade infrastructure, valuation practices and risk controls, rather than simply when regulators define the rules.

“The next phase of digital asset growth will not be regulation-led – it will be capability-led. When advisers, platforms and DFMs can govern, measure and explain digital strategies just like any other alternative asset class, adoption will accelerate,” Cooke concluded.