State Street is set to launch new cryptocurrency custody services, once regulators give it the green light.
State Street, the second-largest US bank with nearly $4 trillion under management and a 230-year history, is ready to offer its clients and investors new cryptocurrency custody services, according to the bank’s executive vice president Nadine Chakar, who is also head of the State Street Digital digital assets division.
Chakar le said Bloomberg reported that the US bank is only awaiting approval from financial regulators to launch its new cryoptocustody service. “The moment we get the go-ahead, we will be ready”, said the director of State Street Digital, noting that cryptocurrencies have a lot of potential to become a major investment asset and alternative safe haven. According to Chakar, the new crypto custody services will give a big boost to the cryptocurrency industry, considering the “mega plans” that the bank has to open the doors of the crypto world to its clients and investors.
With these new services, State Street seeks to close the current gap between the traditional financial system and cryptocurrencies, bringing its clients and private fund managers closer to digital assets. This move represents an important milestone for the crypto industry, considering that State Street is considered a Global Systemically Important Financial Institution (G-SIFI); that is, one of the banks with the greatest influence in national and international financial markets. “too good to fail”.
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VanEck Bitcoin ETF Manager
State Street announced its official entry into the cryptocurrency world last year. In March, the bank reported that it had been selected by management firm VanEck as the manager for its exchange-traded fund (ETF). VanEck Bitcoin Trust, without approval by the United States Securities and Exchange Commission (SEC).
Later in June, State Street announced the launch of its digital asset division State Street Digital, in order to focus on new finance. A month later, the bank revealed a partnership with cryptocurrency software and data solutions provider Lukka to enable new custody and crypto asset management services. At the time, Chakar explained that the bank would expand its fund management capabilities into digital assets, to offer its clients new alternative investment opportunities.
Chakar noted that the accelerated growth and popularity of the crypto industry globally sparked great interest among its clients and investors, so the demand for crypto assets motivated the bank to build the necessary infrastructure to develop new digital asset services, in order to meet the growing demands and requirements of its clients.
In 2020, the bank led Lukka's Series C funding round. CEO Robert Materazzi said State Street is at the forefront of adopting new technologies “to usher in the next generation of fund management” linked to digital assets.
State Street Digital
State Street's crypto division, State Street Digital, was created to address the shift of the traditional financial industry toward a global, decentralized digital economy, the bank said. At the time of its launch, Ron O'Hanley, president and CEO of State Street Corporation, said: “The financial industry is transforming into a digital economy, and we see digital assets as one of the most important forces that will impact our industry over the next five years”.
For O'Hanley, cryptocurrencies will form the new financial services, so State Street will focus on building the necessary tools to provide its clients with new solutions based on the digital industry.
Traditional banks and cryptocurrencies
In addition to State Street, other major US banks are also making big strides into the crypto industry. BNY Mellon, US Bank, JP Morgan, Goldman Sachs y Signature Bank are among those who have announced the creation of new cryptocurrency-based services to bring their clients closer to the potential of the crypto world. JP Morgan even went a step further and launched its first virtual headquarters in the Decentraland blockchain metaverse.
In July of last year, financial firms New York Digital Investment Group (NYDIG), dedicated to the management of digital assets, and NCR Group, a business payments company, signed an alliance to begin bringing together Bitcoin cryptocurrencies have already been introduced to millions of US citizens, through hundreds of commercial banks in the country. Finally, the prestigious auditing firm Deloitte said in August that traditional banking must prepare for an imminent future full of cryptocurrencies.
Continue reading: Deloitte: Banks must prepare for an imminent digital future full of cryptocurrencies
