Key points:

  • State Street creates new services in the field of digital assets, including the tokenization of real assets.
  • The company offers institutional clients services for the storage of crypto assets, meeting high security standards.
  • The transformation of traditional assets into digital tokens on the blockchain allows for easier trading and increased transparency of operations.

In an effort to meet growing institutional interest in digital assets, State Street has announced a partnership with Swiss crypto company Taurus. Together, they plan to launch new digital asset services, including the tokenization of real assets.

The move reflects a growing trend of cryptocurrencies being integrated into the traditional financial system through regulated instruments such as futures and exchange-traded funds. Institutional investors are increasingly looking to digital assets as a means to hedge against inflation risks and diversify their portfolios.

State Street innovations

Under the new partnership, State Street, a crypto fund management and accounting firm, will hold custody of clients’ crypto assets and help create tokenized assets such as funds and securities.

The process of tokenization involves converting ownership of traditional assets into digital tokens that are recorded on a blockchain, a decentralized database that all participants can access. Proponents of the technology say the consensus mechanism underlying the blockchain provides a high degree of transparency and security, making it easier to trade assets.

Cryptocurrency services driven by ETFs

A striking example of blockchain tokenization is the BlackRock fund, which allows investors to receive income in US dollars. Donna Milrod, Chief Product Officer at State Street, emphasizes that the company’s new service is aimed at meeting the growing demand from asset managers looking to tokenize their funds.

State Street offers institutional investors secure storage of crypto assets, acting as a traditional bank rather than a crypto exchange or wallet provider. This approach meets the high security requirements of institutions.

The growth of institutional interest in cryptocurrencies is confirmed by the successful launch of several exchange-traded funds for bitcoin and ether. Large financial institutions such as Goldman Sachs and Morgan Stanley are actively investing in these instruments. State Street is also actively involved in the development of the crypto industry: the company has applied for registration of a crypto fund and plans to provide crypto asset storage services.

However, according to updated regulatory requirements, providing crypto storage services for publicly traded banks has become very expensive. Despite this, many large financial institutions, such as Taurus and Bank of New York Mellon, have already launched their platforms for storing crypto assets, emphasizing the importance of this area in the modern financial world.