State Street, considered one of the largest financial services companies in the world, which operates as a bank holding company, is looking with great interest towards the cryptocurrency industry and blockchain technology.
The Boston-based company plans to become the next big player in the banking and financial industry to hold cryptocurrencies.
Nicole Olson, vice president of digital product development and innovation at State Street, told Blockworks that the banking holding company will offer its institutional and corporate clients crypto-asset custody services next year. In addition, it is Exploring the potential of tokenization to discover their benefits and the ways in which they can optimize the financial industry at large.
State Street believes in cryptocurrencies and blockchain tokenization
The American company has been at the forefront of new technologies in the banking and financial industry since 2016. State Street began implementing the blockchain in securities lending, to automate and optimize its issuance process through blockchain-based software.
Last year, the banking holding company also used this technology to create smart contracts with which Automate the settlement of guaranteesThe company started a pilot with Vanguard, in which it liquidated $100.000 using the blockchain. It was also participating in Securrency’s $30 million capital round to enhance its tokenization efforts. Securrency is a company that uses blockchain to improve capital formation and stimulate global liquidity.
All of this experience gained by State Street in the crypto and blockchain industry is driving the banking holding company to build new products and services focused on the new digital economy and decentralized finance. Its interest in asset tokenization comes as more financial institutions and companies are entering the crypto industry.
What is asset tokenization?
In simple words, tokenization is the creation of a digital representation or version of a real asset or product on the blockchain, so that said asset or product exists and can be used within the digital world.
Asset tokenization is being seen as a potential tool for banks and financial institutions to take their assets to new frontiers while adding a unique layer of security thanks to blockchain technology.
Due to the great potential of this innovation, State Street indicated that in addition to offering services in a variety of digital assets, including CBDCs, stablecoins and cryptocurrencies, the banking holding company It will also include tokenization and smart contracts in its infrastructure and service model..
Olson told Blockworks that tokenization is a way to add digital technology to more traditional assets to take them to the future.
What are State Street's efforts in tokenization?
The banking holding company has a digital assets division, called State Street Digital, headed by Nadine Chakar and of which Olson is a member. From this unit, State Street is driving the creation of innovative solutions focused on the digital economy, to meet the demands of its clients and investors and secure a place in the new future.
The company has also been conducting proofs of concept to tokenize different assets and products, such as fund shares, to allow them to be traded more freely and accessibly via the blockchain. State Street has been conducting these proofs of concept alongside several asset managers, it said.
As we have reported on Bit2Me News, State Street has signed important agreements with companies such as Copper and Lukka to open the possibility of investing in crypto assets such as Bitcoin to its clients. In March of this year, the banking holding company also announced that it was awaiting the approval of financial regulators to launch its new institutional-grade crypto custody services.
State Street is one of the largest and most important financial companies in the world, with more than $42.600 billion under management as of the end of last month.
Continue reading: State Street and Copper collaborate to launch institutional-grade cryptocurrency custody
