EY advises companies to manage the payment methods directly to retain customer loyalty.

EY Digital Assets leaders Mark Nichols and Rebecca Carvatt contend that the wallet has evolved from a mere crypto accessory to the central strategic interface for the forthcoming era of global finance.

EY forecasts that the competition for digital access represents the new financial frontier. (Pixabay, modified by CoinDesk)

Key points:

• Leaders in EY’s digital assets sector assert that wallet infrastructure, beyond mere tokenization, will determine the market victors.
• While tokenization is already transforming financial market infrastructure, true disruption is anticipated in capital efficiency and programmable transaction chains.
• With regulations advancing and wallet adoption increasing, EY identifies a strategic necessity for financial institutions to act promptly.

In the changing realm of digital finance, the Big Four consulting firm EY has focused on what it perceives as the next crucial frontier: wallets.

According to Mark Nichols, principal at EY, wallets are increasingly recognized as the vital interface for the forthcoming phase of financial services, transcending their role as merely storage solutions for cryptocurrency.

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“The wallet represents the strategy,” Nichols, who co-directs the firm’s digital assets consulting division, stated in a CoinDesk interview. “Ownership and management of the wallet will determine the client relationship.”

Nichols and his counterpart on the West Coast, Rebecca Carvatt, regard wallets as more than mere infrastructure. They function as the gateway to the storage, transfer, and management of tokenized value in an environment where financial instruments, ranging from payments to private credit, are progressively transitioning onchain, he noted.

Beyond custody: Wallets as the center of tokenized finance

The vision is extensive. Wallets are evolving from being a specialized tool for crypto enthusiasts to becoming the essential link within a wider tokenized financial system. According to Carvatt, co-leader of EY’s digital assets consulting unit, wallets will soon be vital for retail investors, asset managers, treasurers, and even commercial banks.

“They will serve as the access point for all — payments, tokenized assets, and stablecoins,” she remarked.

From EY’s standpoint, wallets are emerging as the future’s bank accounts, offering services designed not only for individuals but also for corporations and institutional investors that require intricate integration with risk management systems, compliance mechanisms, and real-time capital flows.

The message is evident: whoever holds control over the wallet governs the relationship. For financial institutions currently ceding ground to crypto-native platforms, this shift is critical.

Beyond liquidity: The true potential of tokenization

The overarching transition to tokenization is frequently depicted as a quest for liquidity, yet EY posits that this perspective overlooks its genuine significance. “It’s not solely about liquidity,” Nichols asserts. “Liquidity isn’t the ultimate goal; it’s about the utility that onchain finance facilitates.”

EY envisions blockchain as a real-time infrastructure for financial markets, enabling programmable transaction chains and fundamentally altering capital management. While tokenization does facilitate atomic settlement, its actual strength lies in margin optimization and operational efficiency.

Nichols highlights situations where firms can utilize stablecoins or tokenized assets to address margin calls more frequently and accurately. This approach subsequently lowers initial margin requirements, allowing more capital to be available for investment. “It’s about improved risk alignment and real-time capital management,” he explains. “And the wallet becomes the key to making that feasible.”

A decade in the space: EY’s extensive crypto expertise

While some companies are striving to catch up, EY has been active in the digital asset domain for over 12 years. Its early commitments to crypto-native audit and compliance operations now encompass thousands of professionals, assisting with a variety of tasks from hedge fund tax returns to tokenized M&A advisory.

“We’ve collaborated with all types of clients — large banks, asset managers, exchanges, digital natives, and infrastructure providers,” Nichols states. “and have been engaged in the digital asset ecosystem for over a decade.”

EY’s hedge fund audit division was among the first to support crypto, and its advisory team has aided firms in preparing for public listings and navigating complex regulatory landscapes. The firm has created specialized services for wallet monitoring, onchain compliance, and token-specific tax reporting. It continues to counsel traditional financial institutions on designing secure and compliant digital asset strategies, particularly as they begin to develop or integrate wallet infrastructure.

Wallets for all: A segment-by-segment analysis

EY emphasizes that wallet requirements are not uniform. Consumers seek seamless user experiences and secure access to payments and cryptocurrency. Corporates require integration with treasury functions and regulatory compliance across various jurisdictions. Institutional clients demand secure custody, connectivity to decentralized finance (DeFi) and staking products, and integrated risk management tools.

According to EY, self-custody is unlikely to become mainstream. Most users or institutions prefer not to handle their own private keys. Instead, reliable wallet providers will emerge, which could be banks, fintech companies, or specialized custodians, each customizing their offerings based on the specific segment they cater to.

Thus, provisioning wallets becomes a strategic necessity. Whether firms opt to build their own, acquire providers, or establish partnerships, the wallet is the new entry point to financial services. Organizations that take action now will lower future customer acquisition costs and secure a stronger position within the digital asset ecosystem.

Regulation: A driver, not an obstacle

A prevalent belief regarding tokenization is that regulation acts as a hindrance. However, EY’s leaders maintain a different viewpoint. “We already possess the regulatory framework in core markets, and alongside the broader industry, the enactment of market structure legislation will facilitate the resolution of outstanding issues,” Nichols observes. “A security is a security, a commodity is a commodity. Blockchain is simply a technology.”

In the U.S., the GENIUS Act and existing Securities and Exchange Commission (SEC) exemptions create pathways for compliant tokenized products. Worldwide, jurisdictions are competing to foster digital asset innovation with evolving licensing frameworks. Although harmonization efforts are ongoing, the momentum is unmistakable.

EY perceives this moment as a call for maturity, a pivotal point where infrastructure is aligning with vision. “We’ve moved beyond the experimentation phase,” Carvatt states. “The focus now is on safe, scalable implementation.”

Rethinking asset management from the ground up

The influence of tokenization and wallet infrastructure is particularly significant in asset management. A conventional fund typically necessitates a distribution network, an investment team, a custodian, a fund administrator, and regulatory reporting channels. With tokenization and smart contracts, much of this structure can become programmable and potentially obsolete.

“Asset managers simply want to create exceptional portfolios,” Nichols notes. “Blockchain enables them to do so without the legacy complications.”

By tokenizing fund underliers and embedding logic into smart contracts, asset managers can automate functions like distribution, compliance, and reporting. This transformation paves the way for reduced fees, broader investor access, and new product types, especially in private credit and alternatives, where costs have historically posed a challenge.

“From the unbanked to the unbrokered, we’re witnessing more individuals gaining access to assets that were previously inaccessible,” Carvatt states. “That’s impactful.”

The future of finance is onchain

Whether for cryptocurrency, payments, or tokenized assets, wallets will serve as the gateway to a new financial landscape. Firms that overlook this will face the risk of becoming irrelevant. Those that embrace it will possess the infrastructure and the client relationships central to digital finance.

“The future of finance is on-chain,” Nichols asserts. “And the wallet is at its core.”

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