State Street, a major U.S. financial services provider, is collaborating with Swiss cryptocurrency firm Taurus to expand its digital asset offerings. This partnership aims to meet the increasing institutional demand for digital investments by facilitating the tokenization of real-world assets.
The alliance will enable State Street to support clients in managing and tokenizing assets, including funds and securities. By integrating Taurus’s technology, State Street plans to offer services that convert traditional asset ownership into digital tokens on a blockchain. This approach is designed to enhance asset liquidity and security, leveraging the blockchain’s transparency and consensus mechanisms.
As cryptocurrencies gain traction within regulated financial products such as futures and exchange-traded funds, institutions are increasingly interested in these assets as tools for inflation hedging and portfolio diversification. For instance, BlackRock has already launched a tokenized fund on the Ethereum blockchain, providing U.S. dollar yields to investors.
Donna Milrod, Chief Product Officer at State Street and head of Digital Asset Solutions, emphasized that the new service will cater to asset management clients who need both traditional and digital asset management. The exact launch date of the service has not been disclosed.
State Street’s move comes as institutional interest in digital assets surges. This year, the introduction of several spot bitcoin and ether ETFs has seen significant investments from firms like Goldman Sachs and Morgan Stanley. Additionally, State Street Global Advisors has filed with the SEC to register a new crypto fund, managed by Galaxy Asset Management, which will focus on crypto-related investments.
The partnership with Taurus, which has previously collaborated with Deutsche Bank on crypto custody and tokenization, underscores State Street’s commitment to providing secure and reliable custody solutions for digital assets. However, plans to offer crypto custody services are contingent upon forthcoming SEC revisions to 2022 accounting guidelines that currently impose high costs on banks storing crypto assets.
The Bank of New York Mellon also launched a crypto custody platform in 2022, reflecting a broader trend of financial institutions enhancing their digital asset capabilities.
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