Somewhere in a financial institution right now, a digital asset strategy sits approved but unexecuted.

The board signed off.

The budget is allocated.

The partners are selected.

But the head of product is staring at an 18-24 month timeline, a huge amount of resourcing to support the project, potentially having to remove existing systems, and the growing realization that even if they build it, the system likely won't scale beyond a certain point, and they will be bound to some sort of vendor lock-in.

Institutions are also sometimes hesitant to spend resources building something they are not experts in.

An established digital asset player faces a parallel reality.

Their infrastructure works for now. But their team knows the threading across a bunch of fragmented backend systems isn't sustainable. As one executive at a major digital asset firm recently acknowledged: "This is not going to be scalable for us."

Then there’s a group of firms and organizations that are creating new products, services, networks, and L1s.

For them, the goal is to grow revenue and AUM in these services, but to do so, their clients need an easy way to use and leverage them on an ongoing basis.

The reality is that the digital asset economy remains hard to integrate with and use alongside most firms’ existing systems.These institutions face the same fundamental operationalization crisis. Industry discourse often centers on selecting the "winning" digital asset partner or provider (i.e., blockchain), but that focus misses the structural reality.

The true barrier isn't chain selection.

The barrier is the lack of infrastructure to represent and scale complex operations across traditional and tokenized systems.

The Wrong Debate

The industry spends immense energy trying to nail which ledger technology will win in the digital asset ecosystem.

This winner-take-all mentality ignores the pattern recognition of financial history. We are moving toward a world of permanent coexistence, where traditional systems, private ledgers, and public blockchains operate simultaneously.

Consider USDC, the widely used dollar stablecoin.

It is natively issued on more than 15 blockchains.

Operationally, Circle treats each deployment as a distinct asset instance.

For treasurers and operations teams, "USDC-Ethereum" and "USDC-Solana" require separate tracking, separate workflows, and separate reconciliation. They are the same dollar claim, yet they represent two different assets operationally.

SWIFT’s recent tokenization experiments confirm this trajectory, concluding that financial institutions will operate across various public and private blockchains for the foreseeable future.

The strategic imperative shifts from betting on a winner to building the capacity to operate across all of them.

The Fragmentation Reality

Traditional finance has long managed asset proliferation.

We evolved from pure cash to stocks and bonds, then to ETFs, and eventually to complex mortgage-backed securities. Each wave created new systems that rarely communicated with one another.

Digital assets have multiplied this fragmentation.

We now have tokenized deposits, tokenized funds, crypto, and stablecoins all sitting on different ledgers with different data standards.

Tokenized U.S. Treasuries alone grew from $100 million to over $1 billion in just over a year. Each of these assets exists on different platforms, requiring different operational workflows.

Consider the "stablecoin sandwich" the seemingly simple process of converting cash to stablecoins.

Even this basic use case requires coordinating across multiple backend systems: the bank’s core ledger, the minting platform, the custody solution, and the destination wallet. There is no native visibility across this chain. T

he fragmentation tax is paid in speed, cost, and operational risk.

The Visibility Void

This fragmentation creates a critical blindness.

Most firms cannot see their positions across systems in real-time. Instead, they reconcile data days after the fact, aggregating disparate reports from custodians, banks, and on-chain data providers.

In a market defined by 24/7 volatility, waiting for batch reconciliation means making decisions on stale data.

You cannot manage liquidity or risk effectively when your view of the world is 48 hours old.

The regulatory dimension is tightening.

The Basel Committee’s new cryptoasset framework, effective January 2025, requires banks to aggregate exposures across traditional and tokenized forms of the same underlying asset. You cannot report what you cannot see.

Institutions operating with fragmented visibility will face compliance challenges that go beyond operational inconvenience. They need a view that penetrates to the sub-account level, identifying not just the asset, but the owner, regardless of where that asset sits — capabilities that require unified transaction management infrastructure purpose-built for multi-system visibility.

The Vendor Lock-In Trap

When institutions build for immediate needs and operational workflows that support specific vendors without architectural foresight, they create long-term constraints.

This risk extends beyond blockchains to the entire vendor ecosystem: custodians, wallet providers, tokenized fund platforms, and issuers.

We saw this pattern 7 years ago with firms that built heavily on early enterprise blockchain platforms such as Hyperledger Besu.

The ecosystem evolved. Their architecture didn't. Now they are stuck maintaining legacy integrations or facing a complete rebuild.

The digital asset landscape evolves rapidly.

Today’s leading custodian or wallet provider may not be the optimal choice in 6 months, let alone years.

Without a flexible middleware layer—such as interoperability connectors that abstract vendor dependencies—swapping a vendor requires rebuilding the operational workflow from scratch. The infrastructure decision firms make today must work for "phase one of your business, and it should work for you in five and 10 years."

The Two-Sided Market Failure

This infrastructure gap creates a two-sided market failure.

On one side, institutions struggle to operationalize strategies.

On the other, product issuers L1s, tokenized funds, white-label stablecoins, struggle to gain traction.

Great products often fail to scale because customers lack the infrastructure to consume them. We see networks with hundreds of millions in investment and backing from top-tier banks, yet still see low transaction volume.

The friction of integration into daily usage is too high.

When the operational lift to integrate a new network, product or service takes months of engineering time whether due to limited APIs, lack of automation tooling, or complex integration requirements adoption stalls.

The problem isn't the product quality; it's the integration gap that prevents institutions from operationalizing these solutions at scale.

Universal Asset Representation: The Missing Layer

To bridge this divide, the industry requires a new architectural foundation: universal asset representation.

This concept relies on a single data format that can represent any store of value, independent of the underlying blockchain, ledger, or traditional system. It is a representation so flexible that it can represent anything, from tokenized funds to stablecoins to crypto.

Universal asset representation must be middleware controlled and operated by the main clients themselves.

It creates a ledger-agnostic source of truth that shows not just what assets exist but who owns them, where they sit, and how they move across every system in the ecosystem, whether in the traditional or tokenized asset world. It provides real-time visibility into assets and owners across sub-account structures, spanning traditional systems, custodians, wallets, and blockchains.

By decoupling the asset representation from the underlying ledger, institutions can coordinate operations more effectively across assets using a single technology stack rather than multiple backend systems. They can also coordinate across multiple vendors, swapping a custodian or adding a new L1, without rebuilding their core operational workflows.

Universal asset representation also allows internal workflow optimization within a firm, shifting the organization from reactive firefighting to proactive business decision-making based on a unified, real-time view of capital.

Making Digital Assets Usable Alongside TradFi

Consider the friction of early e-commerce.

To procure goods from five different vendors, a consumer had to navigate five distinct websites, manage five separate logins, and track five disconnected shipping timelines. It was functional, but operationally exhausting. Then Amazon arrived.

It didn't replace the manufacturers or the goods; it unified the logistics and the user experience into a single, cohesive layer.

Digital assets are currently stuck in that pre-Amazon era.

Even when the rails exist, using them alongside traditional finance is operationally painful. A product or operations lead today must toggle between a custody portal for crypto, a legacy bank portal for fiat, and a separate minting platform for stablecoins. Data is siloed. Reconciliation is duplicated.

The friction is not in the product quality, but in the integration gap.

Universal asset representation acts as this missing integration layer. It provides the "one-stop shop" experience, allowing institutions to interact with digital assets through a single interface while continuing to utilize their existing core systems.

It turns a fragmented, multi-portal struggle into a unified command center. Instantly.

The Evaluation Framework

As heads of product and strategy leaders evaluate their readiness, they should stress-test their architecture against the reality of a multi-asset future. Consider these four questions:

1. Time to Operationalize: When your firm approves a new digital asset strategy, how long will it take to execute? If the answer is measured in years rather than months, your architecture creates a competitive disadvantage.
2. Vendor Flexibility: If a key relationship changes, a custodian, an L1, a wallet provider does your operational workflow require a rebuild? True infrastructure allows for configuration changes, not code rewrites.
3. Visibility Latency: Can you see your positions across all systems,traditional and tokenized in real-time? Relying on T+1 reconciliation in a T+0 market creates unacceptable risk.
4. Integration Scalability: Does adding a new asset type or blockchain require a dedicated integration project? If every new asset is a new project, you are building silos, not scalable infrastructure.

Explore real-world implementations of universal asset representation:

• Digital Asset Operations: From Onboarding to Settlement