State Street to launch digital asset custody business in 2026 amid shifting regulatory landscape: The Information

State Street, a large custodian bank with a footprint in crypto, plans to launch a digital asset custody business next year, according to a report from The Information. The move represents something of a step change for Wall Street banks, which have so far been mostly unwilling to handle crypto directly. 

It also comes shortly after the U.S. Securities and Exchange Commission canceled a controversial accounting bulletin, SAB 121, which required that companies holding crypto assets on behalf of their customers must record a liability and corresponding asset on their balance sheet. 

SAB 121 was opposed by both crypto industry participants and many players in TradFi due to the prohibitive costs associated with compliance. The guidance was also opposed by a number of lawmakers in Washington, including Sen. Chuck Schumer, D-N.Y., after the watchdog Government Accountability Office found it violated congressional processes. 

In particular, State Street is looking to offer custody as well as transfer agency services for tokenized assets to investors, according to The Information, citing Chief Product Officer Donna Milrod. These services could include assisting clients in using tokenized assets — like tokenized Treasurys — as collateral.

Milrod notes the firm will “onboard clients across these services in a phased manner” beginning next year. However, the Federal Reserve will have to sign off on many of State Street’s crypto custody business ideas. 

This would not be the first time State Street has jumped into the crypto fold. As far back as 2028, State Street partnered with crypto data provider Lukka to develop comprehensive digital asset fund administration services.

State Street Digital, originally led by the current head of DTCC’s digital asset division, Nadine Chakar, was formed to expand its crypto activities in 2021. One of the first changes was upgrading GlobalLink — used to manage trading operations — to support crypto assets.

The firm is also the fund administrator and transfer agent for several crypto exchange-traded funds, including the VanEck Bitcoin Trust, as well as the issuing and paying agent and administration agent for two new European ETCs.