Asset manager Schroders (AUM £758bn / $1 trillion) is setting up a digital assets center of excellence in Singapore after participating in the local Project Guardian tokenization sandbox.

While Singapore has been at the forefront of digital asset and tokenization innovations, it’s notable that a UK headquartered entity would choose the jurisdiction despite its home country launching a Digital Securities Sandbox (DSS).

The asset manager says it wants to participate in driving best practices in the sector by engaging with global policymakers. It also intends to contribute to knowledge sharing through partnering with local universities. This follows in the footsteps of fellow fund manager Northern Trust, which has made similar moves in Singapore.

“Digital assets are transforming asset management in a tale of two halves – the existing financial ecosystem, and the new digitally native ecosystem,” said Meagen Burnett, Schroders CFO. “Through engaging regulators, cross-industry collaboration and building capabilities, our Digital Assets Centre of Excellence will navigate these two halves, of digital assets and technology in the existing world, while continuing to explore opportunities for Schroders in the new one.” She also noted the importance of embracing new technologies to serve the next generation of clients.

Schroders intensified its focus on digital assets in 2023 when it partnered with UK fund distribution platform Calastone, a trailblazer in fund tokenization. Around the same time it joined Project Guardian. Its trial involved experimenting with Singapore’s Variable Capital Companies for fund tokenization, which at the time were newly introduced in the city-state. The aim was retail reach, automation and to enable greater personalization.

Since then other arms of the asset manager have explored digital assets including Schroders Capital which was involved in tokenizing insurance linked securities (ILS) on a public blockchain.

However, unlike several competitors including UK-based abrdn, Schroders has yet to launch a public tokenized fund offering outside a sandbox. Other traditional finance firms that have already taken the step include BlackRock, Fidelity International, Franklin Templeton, UBS and Wellington. With the launch of the Schroders center of excellence, that’s likely to change.