The State Street Bank of the United States has announced a new division focusing on cryptocurrencies, blockchain technology, central bank digital currency, and tokenization in the digital finance arena.
Nadine Chakar, State Street’s head of global markets, will lead the new ‘State Street Digital’ branch, which will report to chief operating officer Lou Maiuri.
“We see digital assets as one of the most significant forces impacting our industry over the next five years. Digital assets are quickly becoming integrated into the existing framework of financial services,”the company’s chairman and CEO Ron O’Hanley said on Thursday, June 10, and added that the bank is preparing itself to serve customers as their appetite rises.
The Boston-based bank said that it is expanding its digital footprint to encompass tokenization, blockchain, CBDC, and crypto assets and upgrading its current GlobalLink platform to a multi-asset digital trading system.
According to State Street, the goal is to expand into a multi-asset platform that will accommodate cryptocurrencies as well as other asset classes and support its peer-to-peer objectives by generating new liquidity venues for its investors and consumers throughout the world.
State Street said in April that it was working on a new digital asset trading platform that will go live in the middle of the year, thanks to a partnership between the bank’s Currenex trading technology supplier and London-based Pure Digital. This interbank digital currency marketplace aspires to be the institution’s preferred crypto trading platform.
State Street executives refused to say if the bank will utilize the platform for bitcoin trading during that period. However, it has now been revealed that the bank intends to use the platform to develop a cryptocurrency business.
State Street Bank manages $3.6 trillion in assets and has $40.3 trillion in assets under custody. The bank is the second of the five leading global custodians to announce plans to launch digital asset trading services. BNY Mellon has revealed intentions to begin offering bitcoin services to its clients this year.
Stronger Crypto Oversight Is Needed
Although institutional investors’ growing interest in Bitcoin has spurred its current bull run, the cryptocurrency still has several dangers, and skeptics are still hesitant to invest in it. Crypto assets and organizations that provide such services are primarily unregulated among them.
Last month, US Federal Reserve Chairman Jerome Powell increased the pressure on crypto assets, claiming that they represent a risk to financial stability and implying that more regulation of the growing popularity of cryptocurrencies may be necessary.
The Treasury Department also expressed worry that affluent individuals may exploit the uncontrolled cryptocurrency market to avoid paying taxes and stressed that large bitcoin transfers should be reported to authorities.
The back-to-back revelations occurred a week after Bitcoin’s value plummeted by more than 30%. Following China’s announcement of a fresh crackdown on the industry, they were citing the volatile nature of cryptocurrencies as the reason.
During that time, Powel also stressed the importance of a defined timeline as the Fed considers the potential of introducing its digital currency.