State Street stands up new crypto unit as it eyes potential custody, DeFi products

Quick Take

  • State Street stood up a new dedicated crypto and digital asset unit
  • The firm could launch custody and offer a way for institutions to dabble in peer-to-peer trading 

State Street wants to send a message to Wall Street: the custodial banking firm is serious about digital assets. 

To that end, it's built up an entirely new business unit dedicated to digital assets, tokenization, and cryptocurrency assets. Announced Thursday, the new unit — dubbed State Street Digital — will be led by Nadine Chakar, an executive Vice President at the firm. 

"It's a real sign of commitment from our CEO," Chakar said, referring to Ron O'Hanley, who in a statement said that digital assets are becoming an important part of the broader financial services industry. 

"The objective is to evolve the platform into a multi-asset platform to support crypto assets among other asset classes," O'Hanley said. 

In a sense, State Street's new unit — staffed by 400 employees — continues much of its previous work in the digital asset market. The firm has partnered with a number of companies offering bitcoin products, serving as the administrator for a planned bitcoin ETF set to list on the Frankfurt Stock Exchange. It is also the appointed transfer agent for VanEck's Bitcoin Trust.

Still, the firm has historically shied away from talking about entering the bitcoin custody market, which has seen interest from firms ranging from Citigroup to JPMorgan. Chakar told The Block that custody is on the firm's radar and it would launch such a product, pending the necessary regulatory approval. 

"We are building and will deploy at the right time," Chakar said. 

For now, on the crypto front, the firm will continue to offer its fund administration services and offer clients a white label software service that allows clients to trade across various liquidity venues. The list of clients interested in these products appears to be extensive. 

THE SCOOP

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