State Street is exploring a stable deposit and token launch: report

State Street Corp., a major player in Boston-based traditional finance, is exploring the launch of its own stablecoin and token deposits to improve payment settlement using blockchain technology.

According to a Bloomberg report on Wednesday, the bank has actively made efforts to integrate itself into the crypto space.

State Street is driving digital expansion

In addition to ongoing stablecoin efforts, State Street wants to participate in the development of the digital cash consortium and explore settlement options through Fnality International, a fintech company in which it has invested.

Fnality focuses on blockchain-based payment solutions, which are central to State Street’s strategy to streamline global payments. The company has increased its efforts in digital assets, integrating its team dedicated to general business operations. This aligns traditional finance with digital assets.

State Street has been making moves in the blockchain industry. It currently provides fund administration and accounting services for spot Bitcoin ETFs and has partnered with Galaxy Asset Management to develop digital asset ETFs.

Meanwhile, it was reported earlier last month that State Street was rebuilding its digital assets division just six months after cutting the team, with plans to offer crypto custody services.

The company also recently surveyed 300 investment institutions, which revealed that nearly half are ready to trade digital assets on and off distributed ledgers, given the right infrastructure.

Major banks and institutions are adopting Crypto

In traditional finance, major players are increasingly turning to the tokenization of real-world assets (RWAs), such as bonds and funds, by leveraging blockchain. This has added benefits such as better efficiency, faster settlements and reduced administrative costs.

Meanwhile, stablecoins are attractive because they are tied to the value of a stable asset, often the US dollar, and provide a digital representation of a fiat currency on the blockchain.

JPMorgan Chase & Co. has been at the forefront of the adoption of blockchain technology. The entity launched its Onyx blockchain and JPM Coin in 2020 and expanded with the tokenized collateral network in 2023.

On the other hand, Goldman Sachs started trading digitalized bonds on blockchain in 2021, while PayPal launched its PYUSD stablecoin in August 2023.

In March, BlackRock ventured into asset tokenization with a digital liquidity fund a few months after launching a successful one-time Bitcoin ETF. These developments paint a picture of the growing acceptance of digital assets in mainstream finance, with institutions looking to adapt to the market using blockchain technology.

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