- State Street creates a digital finance unit that focuses on bitcoin, digital currency, central bank, blockchain technology, and tokenization
- We consider digital assets to be one of our most important forces in the next five years, said CEO Ron O’Hanley
- Appoints Nadine Chakar to lead the Digital State Street for Industry Shift to a digital economy
State Street, the country’s second-oldest continuously operating bank, has launched a new cryptocurrency and digital asset division. State Street Corporation, a multibillion-dollar asset manager, is the latest financial institution to announce the launch of a dedicated digital finance division. State Street announced Thursday morning that it is forming a digital finance division that will include cryptocurrency, central bank digital currency, blockchain technology, and tokenization. State Street Digital will include our proprietary GlobalLink technology platform, which will be enhanced into a digital multi-asset platform. State Street, a U.S. custody bank with $40 trillion in assets under management, has launched a cryptocurrency division.
State Street establishes a digital division
State Street’s latest venture in the cryptocurrency industry was reported by the Finance Times. According to the report, the massive bank has announced plans to establish a new digital division that will allow institutional clients to interact with cryptocurrency assets. State Street Digital will be integrated with the bank’s own electronic trading platform, which the bank plans to expand to include crypto assets as well as other asset classes in the future. Nadine Chakar, a three-decade industry veteran and executive vice president, will lead the new State Street Digital division. Chakar will report to Lou Maiuri, State Street Corporation’s chief operating officer.
We see digital assets as one of the most significant forces impacting our industry over the next five years, said the company’s chairman and CEO Ron O’Hanley in a statement on Thursday, adding that digital assets are quickly becoming integrated into the existing framework of financial services and that the company wants to be ready to serve clients as their appetite grows. Customers’ demand for digital assets has increased by 300 percent in the last few months, according to State Street Digital’s person in charge, Nadine Chakar.
We’ve been working on a number of digital capabilities and other solutions, as well as partnering with and investing in the infrastructure that supports State Street Digital, Chakar said. State Street has a significant role to play in the evolution of digital market infrastructure, and this new division will enable us to contribute our knowledge and resources to the discussion, says Smith. We can assist our clients in bridging the gap between today’s industry and tomorrow’s as digital currencies and tokenization gain traction and transform financial infrastructure and operating models. According to Chakar, the new initiative is the result of a collaboration between the large bank and several academic organizations, as well as local regulators.
The establishment of the new division is not State Street’s first foray into digital assets; in April, the firm was named as the administrator of a German bitcoin-backed exchange-traded note (ETN) issued by Iconic Funds. Securrency, a blockchain-based fintech, and regtech firm received a $30 million Series B round from the firm the same month. In March, VanEck proposed a Bitcoin exchange-traded fund (ETF) in the United States, and State Street was named as the administrator and transfer agent. In 2019, the company partnered with Gemini to test automated reporting services for its custody customers.
Crypto and US Banks
After years of slamming the cryptocurrency industry, American banks have recently changed their tune. Similar to State Street, a half-dozen US behemoths announced plans to enter the digital asset space through various ventures, citing high customer demand. BNY Mellon, the oldest bank in the United States, was the first to offer custody services earlier this year. Morgan Stanley joined the trend soon after. The Wall Street behemoth allowed institutional customers to invest in bitcoin through three funds and filed to buy bitcoin for a dozen of its own funds.
Previous skeptics, such as Goldman Sachs and JPMorgan, have also jumped on board. Despite its CEO’s concerns, Goldman has filed for a Bitcoin ETF, and JPMorgan is reportedly planning to launch an actively managed Bitcoin fund.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.