Technological innovation in asset management: AI and blockchain at the forefront

Blockchain, originally associated with cryptocurrencies, has extended its influence into other sectors, solidifying its role as a key tool in asset management. As Santiago González Ruiz, Investment Director at MAPFRE, explains, blockchain technology “delivers specific benefits focused on three core areas: transparency, efficiency, and security. Ultimately, it’s about creating value from a technological standpoint.”

A major breakthrough is its application in federated systems through smart contracts, which allow physical assets to be fractionalized into tradable units. This process, known as tokenization, opens up investment opportunities previously reserved for large capital investors. For instance, real estate assets can now be divided into smaller shares, lowering the entry barriers for smaller investors. Additionally, the automation enabled by AI—particularly deep reinforcement learning—optimizes these transactions in real-time, enhancing security and minimizing operational risks.

The State of Crypto 2024 report is an essential resource for understanding the impact and applications of these technologies within the finance sector. The report outlines how tokenization is expanding investment opportunities and spurring innovation in a variety of industries. For example, on-chain government bonds facilitate faster, more transparent transactions by removing intermediaries and enabling real-time tracking of funds. The report also highlights decentralized blockchain-based chatbots, which combine artificial intelligence and traceability to offer personalized, efficient customer service.

Moreover, the report emphasizes how adopting blockchain and AI is transforming data management in complex financial markets. These technologies not only streamline operational processes but also enhance system resilience against cyberattacks and financial fraud, making them particularly relevant in a rapidly digitalizing world where data security is a growing strategic priority.

The finance sector has been one of the most heavily regulated since the 2008 crisis, when the need to ensure economic stability and protect consumers became a global priority. Financial institutions were required to adapt to stringent regulatory frameworks designed to prevent strategic risks, highlighting the importance of effective oversight in the introduction of new technologies.

In this context, the Markets in Crypto-Assets Regulation (MiCA) addresses the rise of crypto-assets and related technologies, such as blockchain. Driven by the European Union, it aims to establish a clear regulatory framework that ensures transparency and security in crypto-asset transactions. As Santiago González Ruiz explains, “MiCA provides us with a framework for future strategic decisions.”

MiCA regulates key aspects of crypto-assets, including their issuance, trading, and custody, providing confidence to investors and fostering a safer environment for adopting these technologies. This includes specific requirements for token issuers, who must adhere to transparency and security standards, as well as provide periodic reports detailing their operations.

One of MiCA’s most significant advancements is its emphasis on consumer protection. Crypto-asset transactions, which were once devoid of guarantees, are now backed by minimum quality and security standards. This includes measures to mitigate volatility—one of the primary risks associated with cryptocurrencies—and the establishment of compensation mechanisms in the event of losses.

Moreover, the regulation promotes innovation by offering a regulatory framework that balances flexibility with oversight. Companies working with technologies like blockchain and tokenization now operate within a regulated environment that minimizes legal risks while enabling the development of advanced technological solutions. In this way, MiCA not only regulates but also acts as a catalyst for the modernization of the finance sector.

Globally, MiCA is setting a precedent and serving as a model for other regions seeking to balance technological innovation with financial stability. Countries such as the United States and Japan are exploring how this regulatory framework could influence the integration of crypto-assets into their financial systems. The European Union is positioning itself as a leader in digital finance regulation, reinforcing its influence in shaping global standards.

The combination of AI and blockchain offers “opportunities to reduce costs and operational risks, enhance operational efficiency through faster execution times, and, of course, asset tokenization, which enables more effective management and opens new distribution channels,” says González Ruiz. As these technologies continue to evolve, financial institutions are exploring innovative ways to leverage tokenization and automation to deliver more personalized and accessible services. 

The finance sector, historically more conservative and reliant on traditional processes, is undergoing a revolution driven by technological innovation. The adoption of regulatory frameworks such as MiCA, alongside the implementation of advanced blockchain and AI solutions, is laying the foundation for a new era where transparency and efficiency are central pillars. 

These technologies not only improve operational efficiency and security but also open doors to new business opportunities. According to the a16z report, this trend is set to grow, fueled by the rising demand for digital financial solutions. 

In short, asset management is undergoing an unprecedented transformation, driven by the convergence of AI and blockchain. Asset tokenization is democratizing access to investment, while introducing new levels of transparency and efficiency to the finance sector. Regulations like MiCA ensure that this technological progress is achieved securely. 

The impact of these innovations extends far beyond finance—by personalizing services, improving efficiency, and mitigating risks, they are reshaping how institutions manage their assets. With a strong regulatory framework and continued technological development, the future of the sector holds vast opportunities for investors at all levels.

RELATED ARTICLES: