State street eyes blockchain in stablecoin, deposit token: report
According to a report, State Street has shown strong interest in blockchain settlement technology. The global asset manager is slowly making its way into the crypto space, but it could be making a big leap soon.
An unnamed Bloomberg source said State Street is considering creating its own stablecoin and depository. Additionally, it may use its investment in UK-based payments startup Fnality to create new settlement options and join “digital-cash consortium efforts.”
Corporate stablecoins, depository tokens have strong precedent.
State Street is not blazing new trails in blockchain deployment. JPMorgan launched the Onyx blockchain and stablecoin and JPM Coin in 2018. It started in 2020. Goldman Sachs will begin trading digital bonds on its chain next year. JPMorgan introduced a token platform called the Tokenized Collateral Network in 2023 and added a programmatic payment feature months later.
Related: Swiss Bankers Association Introduces Deposit Tokens to Develop Digital Economy
Deposit tokens – digital representations of bank deposits – were pioneered in Project Guardian, a massive asset tokenization project launched in 2022 by the Monetary Authority of Singapore. JPMorgan is a founding member of that project and has released the technology for its own use.
PayPal introduced the PayPal USD (PYUSD) stablecoin in August. In March, BlackRock launched an asset token with a digital liquid fund.
State Street Bullying on crypto ETFs
In the year In 2021, State Street created a standalone digital finance division. That unit later saw layoffs, but was revived this year and reintegrated into the core business. State Street has participated in the trial of the 2022 securities trading agreement with the Depository Trust and Clearing Corporation (DTCC) and other financial institutions.
State Street acts as a fund manager for several Bitcoin (BTC) exchange-traded funds (ETFs). Galaxy Digital is one of the ETF providers it serves, and the two firms have agreed to pursue the creation of a new digital value ETF.
It has filed with the US Securities and Exchange Commission to add the SPDR Galaxy Emerging Technology Enablers ETF, the SPDR Galaxy Digital Asset Ecosystem ETF and the Hedged Digital Asset Ecosystem ETF to its broader fund lineup.
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