The company is considering new ventures in blockchain technology, with a focus on using blockchain for settling payments. This strategic development is a part of State Street’s broader plan to incorporate digital assets, including cryptocurrency, into its range of services and offerings. As part of this initiative, the company is proposing the creation of a stablecoin – a blockchain-based currency linked to a traditional asset, likely the dollar. Additionally, a deposit token would be introduced to represent customer deposits on the blockchain.
This deposit token operates similarly to a conventional deposit held by a licensed depository institution, such as a commercial bank, but it is recorded on a blockchain. Regulation for stablecoins in the U.S. is currently uncertain, with ongoing legislative efforts being led by Reps. Maxine Waters and Patrick McHenry, in addition to discussions in the Senate. Moreover, State Street Global Advisors recently collaborated with Galaxy Asset Management to launch exchange-traded funds focusing on cryptocurrency firms. Furthermore, the company established a dedicated digital assets unit in 2021.