The Funding: Why S&P Global is moving deeper into crypto

S&P Global made two notable crypto moves within four days this week. It announced on Monday that it led an investment in crypto data provider Kaiko, then said on Thursday that it agreed to acquire smart contract security firm OpenZeppelin.

While S&P is not new to crypto, since it already offers crypto indices, assesses stablecoin risks and has rated DeFi protocol Sky and tokenized funds, its recent moves suggest a broader push into digital assets.

So what is S&P building in crypto? The NYSE-listed company, with a market cap of nearly $120 billion, already provides data, benchmarks and risk assessments to traditional financial institutions. It now wants to play a similar role in the crypto world as more financial activity moves onchain.

"We're not chasing token prices; we're following the plumbing," Cameron Drinkwater, enterprise DeFi lead at S&P Global, told The Block. "Markets execute on trust, and the infrastructure of trust — data, identifiers, benchmarks, risk assessments — has to exist on blockchain rails too. The time to help set those standards is now, while the ecosystem is still being built and the role of [AI] agents in regulated financial markets is being defined."

The same business, across different markets

Drinkwater sees S&P's recent crypto moves as extensions of what the company already does in traditional finance. Its Kaiko partnership, for example, aims to make its crypto indices usable onchain, with round-the-clock calculation and coverage of roughly 4,000 indices and reference rates.

S&P's investment in Canton Network developer Digital Asset reflects institutions' growing interest in privacy. Drinkwater said S&P's data and analysis need to be available in the systems institutions choose to use, including networks designed to protect sensitive financial information. She offered limited comment on OpenZeppelin because the transaction has not yet closed.

For Thomas Klocanas, managing partner at Strobe Ventures, OpenZeppelin's commitment to keeping its libraries open-source is particularly important.

"If that holds, S&P is not enclosing the commons. It's putting a ratings firm behind the standard the market already uses. That's how infrastructure actually institutionalizes," he said.

Klocanas is watching whether S&P turns OpenZeppelin's work into a formal product for assessing onchain technology risks. He believes that could eventually mean protocols have both credit ratings and code-risk ratings, affecting fundraising, insurance, bank capital treatment and access to institutional investment products.

S&P's own ambition extends across both traditional and onchain markets. "We believe traditional and onchain rails will run in parallel for a long time, with institutions choosing between them based on utility," Drinkwater said.

The opportunity is to give clients a consistent picture of their assets and exposures across both, she said. That includes common identifiers, prices, benchmarks and risk assessments, even when assets trade on different venues or blockchains.

"As liquidity fragments across venues and chains, the value of a common reference point goes up, not down," she said.

Klocanas described the company's recent crypto moves as "classic S&P strategy."

"They're trying to be the company that tells a bank, an asset manager, or a regulator: here is the price, here is the benchmark, here is the credit quality, and here is whether the code is safe enough to put on a balance sheet," he said. "They win when markets get more complex and more institutional. Onchain markets are both."

Lex Sokolin, co-founder and managing partner at Generative Ventures, also sees a direct commercial reason for S&P's crypto expansion. He said S&P is following demand from Wall Street clients and larger crypto businesses. As traditional assets move onchain, crypto exchanges could also become larger customers for its data and indices, he said.

As stocks, bonds, funds and cash move onchain, "enormous" businesses can be built around issuance, trading, lending, custody, data, compliance and risk management, said Jeff Dorman, chief investment officer at crypto asset management firm Arca.

"We pretend bitcoin matters as a $2 trillion asset... the total amount of stocks, bonds and real estate is $700 trillion. It's a massive opportunity," Dorman said.

Demand is specific, but commercialization is early

Drinkwater described institutional demand for crypto services as "real and increasingly specific," while stressing that "it's very early days from a commercialization standpoint."

Institutions are mainly focused on managing liquidity and collateral, including digital cash used in repurchase agreements and margin processes, "because that's where the efficiency case is clearest today," she said. Repo is short-term borrowing backed by securities, while margin is the collateral required to support trading positions.

These activities create demand for data and benchmarks to value assets, followed by assessments of risk and whether an asset is suitable to use as collateral. "We are engaging with clients around the world on these topics," Drinkwater said.

S&P's broader goal is to bring these answers together. That means using consistent identifiers for traditional and tokenized versions of the same asset, assessing risks in both the collateral and the smart contract code, and providing benchmarks that reflect trading in tokenized markets.

The information would also be delivered in a format that software, smart contracts and AI agents can use directly.

For clients, Drinkwater said, the aim is to answer four questions in one place: "is this the same instrument, what is it worth, what are its risks, and is it eligible?" This would apply regardless of where the instrument is held.

"Historically those answers lived in separate systems, or didn't exist at all for on-chain assets. We believe the data foundations of cross-portfolio visibility and comparability are key to making on-chain assets investable for institutions," she added.

What comes next

Asked about new crypto products, investments or acquisitions, Drinkwater hinted that S&P has future plans: "You should expect us to keep building and partnering."

S&P will prioritize areas where adoption already exists and the economics make sense, Drinkwater said. Some areas of interest she identified include onchain data and reference data, risk and security assessments, and technology that delivers S&P's information directly into onchain processes.

"There is a lot of hype and enthusiasm without production-ready commitment behind it," she said. "We invest time and capital where institutions are already moving, and where our data and benchmarks can help them move with confidence."

For investors and deal advisors, that focus also helps explain which crypto businesses may attract acquisition interest from traditional financial buyers.

Jan-Philip Grabs, co-founder and partner at crypto investment banking firm Areta, pointed to areas where established firms have advantages such as customer distribution, licenses, capital or institutional trust. Those can include payments, institutional trading, tokenization, data and security.

He expects buyers to pursue both new opportunities made possible by crypto and businesses that extend their existing asset management or trading operations.

The incentive to buy is straightforward, according to Arca's Dorman. Traditional firms already have customers and distribution, but often lack the specialist technology and expertise to operate onchain, he said, noting that buying can be faster than building.

He expects acquisition activity across data, custody, security, compliance, tokenization, stablecoin payments and institutional DeFi.

There is also demand for products that help institutions decide what to invest in. Cosmo Jiang, general partner at Pantera Capital, pointed to the S&P Pantera Digital Asset Index, developed with S&P, as an example.

The index is intended to focus on assets with economic activity and value for token holders, while excluding bitcoin and memecoins, as institutional allocators commonly ask what digital assets are used for and whether they generate money, he said. Jiang sees room for S&P to become a leading provider of digital asset benchmarks and indices for products such as ETFs.

The risks

Asked about the main risks to S&P's crypto strategy, Drinkwater said, "The primary risks are pace and posture."

"Adoption could move faster or slower than expected across jurisdictions, and regulation is still evolving. We are building for a hybrid world rather than betting on a single outcome," she said.

"Our advantage is that our existing client and partner networks are investing, learning, and growing alongside us, and they value having our universality – one consistent set of reference points – with them as they do."

She also identified technology and security risks as reasons S&P is investing in assessment capabilities. Its onchain services would follow the same governance, independence and analytical standards as its existing businesses.

An exploit involving a trusted financial brand could cause reputational damage, Klocanas warned. "That's exactly why OpenZeppelin is strategic for S&P: they're buying the ability to underwrite code risk before their clients put real size onchain," he said.

Regulation remains another uncertainty. The Clarity Act failed to advance in the Senate this week, but the Securities and Exchange Commission and Commodity Futures Trading Commission have said they will continue pursuing crypto rules under their existing authority.

Jed Breed, founder and general partner of Breed VC, said agency actions are "definitely enough to keep the gears turning" and allow deals to close during the remaining years of the current administration. He expects that progress could continue under another crypto-friendly administration after the 2028 election.

But without legislation, banks could take longer to commit large amounts of capital from their balance sheets directly onchain, he said.

Pantera's Jiang was more confident that the political direction would hold. In his view, policymakers increasingly associate digital assets with innovation, capital and jobs, making a reversal less likely.

"There will not be an anti digital assets world anymore," he said.

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