by Damian Black
Financial and healthcare technology firm SS&C Technologies has declared ambitious plans to allow digital cash settlements for investment transactions. These are expected to cover stablecoins and tokenized commercial bank deposits. However, so far it hasn’t said when this will happen.
In July SS&C said it planned to build on its existing framework, which already enables asset managers to use tokenized versions of TradFi investment funds. The company boasts 23,000 clients and a market capitalization north of $20 billion.
“Tokenized funds are becoming another mainstream investment structure alongside mutual funds and ETFs,” said Nick Wright, general manager of SS&C Global Investor & Distribution Solutions. “As asset managers begin supporting these products in production, they need infrastructure that evolves with them.” The announcement comes in the wake of SS&C’s acquisition of Calastone – a global leader in wealth management technology – in 2025, for £766 million. SS&C wants to build on its tokenized fund issuance and distribution service as it eyes the next level up in a burgeoning tokenization market. “We have continued to invest in expanding these capabilities, helping clients adopt digital investments with confidence while leveraging the scale, resilience and connectivity they already rely on,” said Wright.
SS&C says it will enable digital investment transactions to settle using “regulated forms of digital cash, including stablecoins and tokenized commercial bank deposits”. The tech firm says this is designed to support “future atomic settlement” – an industry term for simultaneous bilateral transactions.
The firm says this will help reduce settlement risk, improve operational efficiency and simplify cross-border investment transactions as digital markets continue to evolve. “The capability further extends the practical application of tokenized investment products,” said SS&C. “These planned enhancements [will] create a pathway for eligible funds across the combined SS&C and Calastone ecosystem to be transacted and settled using digital forms of cash.”
Stock analysts applaud the move
The NASDAQ listed [ticker: SSNC] firm was recently tipped by Insider Monkey as undervalued thanks to the growing potential its move into digital investments signals. “Given its 39.60% upside potential and 9.80 Forward P/E, SSNC remains one of the undervalued software stocks to buy now,” said the stocks analyst, which also praised the tech company’s tokenized fund launch earlier this year. Simply Wall St agrees that SS&C could be undervalued. “News around SS&C Technologies Holdings moving deeper into tokenized funds and digital settlement comes as the stock trades at US$68.06, with recent share price momentum picking up over the past week but still soft on a year to date basis, while multi-year total shareholder returns remain positive,” said the analyst after the SS&C announcement. It claims that future earnings growth might see SSNC shares climb to what it regards as a “fair value” of $93.
Can SS&C fulfil such optimistic forecasts? Its solid track record suggests it just might. Founded in 1986, it survived the financial crisis that swept Wall St the following year and has since acquired more than 70 other businesses. Its digital platforms service offices across major industries and in recent years it has also incorporated AI into its software – the tech firm certainly appears to have its finger on the pulse.
As well as boasting of past achievements, SS&C insists it has its eyes firmly on the future. “As interest in tokenized investment products continues to grow, the market is increasingly looking beyond tokenization towards the infrastructure needed to support digital transactions,” it said. “Having already enabled the issuance and distribution of tokenized funds, SS&C is now extending its innovation roadmap to support the next stage of the digital investment lifecycle.”
OK, but when is this actually happening?
SS&C’s declaration that “further details regarding product availability and implementation timelines will be announced as development milestones are achieved” is, to say the least, maddeningly unspecific. If increased tokenization is such a beneficial move, why the absence of any rollout timetable or at least a rough date when such might be announced? The Intersection reached out to SS&C for comment but received no definitive response. Reading between the lines of its big talk, the company is taking a cautious stance. And it may well have good reasons for doing so.
Andrew Bahlmann of Deal Leaders International, which specialises in risk management, does not believe the upscaling of tokenization will eliminate hazard completely. “I believe in the direction that SS&C has taken, but I do not think that technology will completely eliminate settlement risk,” he told the Intersection. “The company must ensure that all pieces are working together – including tokenized funds, digital cash, compliant processes, and legacy systems – without introducing new areas for risk.” He agrees that the absence of a rollout timetable should raise a few eyebrows. “SS&C’s cautionary language regarding regulatory and client preparedness is understandable,” he said. “However, stating an intention to pursue tokenization without defining specific timelines, or milestones, diminishes the impact of this announcement. For investors to take seriously a true business plan, they require specific information about pilots, target markets and quantifiable objectives.”
Bahlmann does concede that reconciliation cost reductions, reduced failed settlements, and accelerated payment processing are all potential benefits. “However, these can only be realized when tokenization is adopted on a large-scale basis by clients,” he said. What’s more, upscaling tokenization in effect “adds another layer of complexity to SS&C’s existing systems […] therefore increasing operational costs”. So much for saving money.
Caution is justified
Chris Brooks of Crypto Asset recovery has spent years helping clients locked out of their own money on blockchain wallets due to technical failures. He too is sceptical of the risk-reducing benefits of tokenization, which he warns could throw up fresh hazards if not managed correctly. “On settlement risk and efficiency the tech is real,” he told the Intersection. “Moving funds onto digital rails can cut settlement times and reduce counterparty risk. But tokenization also concentrates risk into keys and smart contracts. If those aren't managed carefully, you’re just trading one failure mode for another.”
As such, he is sympathetic to SS&C’s telescopic approach to rollout. “The vague ‘as development milestones are achieved’ language doesn’t read as evasive to me,” said Brooks. “It reads as caution from a firm that knows the operational and custody problems are hard. I’d rather see that than a fixed date they can’t hit.”
So is this more a case of keeping up with the Digital Joneses than a serious tech-driven financial move? “Both,” said Brooks. “There’s a genuine efficiency case, but part of this is signalling to clients that SS&C won’t be left behind.” And the blockchain veteran has one final warning for all tokenization advocates: “Settlement speed means nothing if custody breaks. In this space, the moment you lose the keys, you lose everything – and the blockchain doesn’t offer refunds.”
