Major American financial services and bank holding company State Street Corporation is expanding its push into the cryptocurrency industry by launching new digital asset services.
State Street, the second-oldest operating bank in the United States, announced Thursday that it would provide digital and crypto asset administration services for the company’s private funds clients. The bank will enable its private fund clients to access a set of institutional-grade middle- and back-office offerings that support diversified portfolios, including crypto-related features like collection, standardization, reporting, processing and reconciliation.
To unlock the services, State Street signed an agreement with Lukka, a U.S.-based blockchain data and software provider focused on reporting audit-ready data on cryptocurrency transactions. State Street is known as a major investor in Lukka, leading the company’s Series C funding round in December 2020.
As part of the partnership, State Street will provide access to a set of Lukka’s proprietary products, including middle- and back-office data management solutions designed for blockchain and crypto-asset data, as well as reference and pricing data. It will allow State Street to consume crypto assets mixed within a private client’s traditional alternative investments portfolios, providing digital assets with the same quality and precision as traditional assets.
The news comes shortly after Street Digital launched a new division dedicated to cryptocurrency and digital assets last month. Called State Street Digital, the new unit is focused on research and tools related to cryptocurrency, blockchain technology, central bank digital currencies, and tokenization.
Related:BNY Mellon joins State Street to service new crypto exchange
“The growth in popularity of digital assets is showing no signs of a slowdown and State Street Digital is committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models to help meet our clients’ growing demands,” State Street Digital director Nadine Chakar said.
Headquartered in New York, Lukka is known as a major player in the digital asset industry in the United States. S&P Dow Jones Indices — a joint venture between S&P Global, the CME Group and News Corp — launched crypto indexes using Lukka’s technology earlier this year.
The second-oldest bank in the U.S. State Street Bank, with close to $4 trillion in assets under management (AUM) and over $40 trillion in assets under custody and administration, is planning to offer cryptocurrency services to its private fund clients.
State Street Partners With Lukka to Provide Crypto Services
In apress releaseon Thursday (July 29, 2021), State Bank announced a partnership with Lukka, a New York-based crypto-asset software and data provider, to offer cryptocurrency and digital asset fund management services to the bank’s private fund clients.
According to the announcement, the American financial institution would offer services related to crypto and digital assets such as collection, reconciliation, standardization, enrichment, processing and reporting. Through the partnership, State Bank would utilize Lukka’s array of software products, including middle and back-office data management solutions, and the company’s reference and prime pricing data.
Back in June, the banking giant launched a new division calledState Street Digital, to incorporate central bank digital currency (CBDC), crypto, tokenization, and blockchain. Nadine Chakar, industry veteran and State Street executive, was appointed to lead the new division. State Street also led a Series C funding round by Lukka in December 2020.
Commenting on the latest development, Chakar said:
“The growth in popularity of digital assets is showing no signs of a slowdown and State Street Digital is committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models to help meet our clients’ growing demands.”
Meanwhile, the partnership between the bank and Lukka signals the continuous adoption of cryptocurrency by U.S. financial institutions. AsreportedbyBTCManagerback in April, State Street said it was offering infrastructure support for a new digital currency trading platform.
Later in July, Bank of New York Mellon (BNY Mellon) and State Street were among aconsortiumcomprising six financial institutions who were behind the launch of crypto trading platform Pure Digital.
Still, in July, JPMorgan became thefirstmajor U.S. financial institution to allow its retail wealth management clients gain exposure to cryptocurrency funds.
Another banking institutional giant Goldman Sachs entered apartnership dealwith Galaxy Digital to offer bitcoin investment services. Citigroup is also considering providing crypto services, following growing clients’ demands.
BNY Mellon is investing in crypto trading platform Pure Digital, along with five other banks.
Pure Digital is aiming to compete with Coinbase and FTX for institutional clients.
The move suggests BNY Mellon is seeing more institutional demand for cryptocurrencies.
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America’s oldest bank furthers its involvement with cryptocurrencies.
BNY Mellon Backs Pure Digital
The Bank of New York Mellon has joined five other banks in backing the institutional Bitcoin trading platform Pure Digital.
The 237-year-old institution announced its plans to add the institutional Bitcoin exchange Pure Digital to its list of crypto-based ventures Wednesday. BNY Mellon will join five other banks who are already backing the platform, including fellow custody bank State Street.
As reported by the Financial Times, BNY Mellon will provide public backing for Pure Digital. It also intends to trade on the platform. The report outlines how BNY Mellon, State Street, and the other unnamed backers aim to create a cash cryptocurrency trading venue to compete against larger industry players such as FTX and Coinbase. It’s set to become the first cryptocurrency trading platform led by banks. According to Pure Digital co-founder Campbell Adams, the first Bitcoin trade is scheduled to take place on the new exchange within a week.
Commenting on the Pure Digital partnership, Jason Vitale, global head of foreign exchange at BNY Mellon, said:
“Digital assets are only going to become more embedded in global markets in the years ahead, and this collaboration accords with BNY Mellon’s wider strategy to develop a digital asset capability for clients across the entire trade life cycle.”
BNY Mellon first started offering crypto custody services to its clients back in February, citing an increase in institutional interest. Since then, the bank has announced it will provide custody and management services for several high-profile clients, including Grayscale Investment’s illustrious Bitcoin trust.
Pure Digital CEO Lauren Kiley also commented on custody banks and crypto adoption. She stated that while Pure Digital had spoken to many top-tier banks, custody banks were more advanced as they were the first to see demand for crypto-related services.
In addition to providing crypto custody services for institutional clients, BNY Mellon has also actively invested in major players in the crypto industry. In March, the bank helped finance the crypto management firm Fireblocks with a $133 million investment.
As BNY Mellon increases its presence in the crypto industry through ventures like Pure Digital, the bank seems set on attracting institutional interest from traditional financial markets. While crypto markets have retreated from their highs earlier this year, institutional involvement with cryptocurrencies is showing no signs of slowing.
Disclaimer: At the time of writing, the author of this feature owned BTC and ETH.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
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Bank of New York Mellon is joining a new cryptocurrency initiative by offering its custody support to a new crypto exchange backed by the American bank State Street.
According to a Wednesday report by the Financial Times, BNY Mellon has joined a consortium of six banks behind the launch of London-based Pure Digital, a new crypto trading platform venture that is scheduled to execute its first Bitcoin (BTC) trade in the near future.
The upcoming crypto venture came under the industry’s spotlight in April, with State Street announcing plans to provide its trading infrastructure to Pure Digital exchange through its foreign exchange technology subsidiary Currenex. The institutional-grade platform is expected to be a fully automated over-the-counter market for cryptocurrencies, featuring physical delivery and bank custody.
According to the report, BNY Mellon and State Street, alongside other unnamed banks behind Pure Digital, will create a cash cryptocurrency trading venue in a bid to compete against larger industry players. “We have spoken to all the top-tier banks but we think custody banks were some of the first to see demand, so they are now more advanced,” Pure Digital CEO Lauren Kiley said.
Pure Digital co-founder Campbell Adams reportedly noted that the firm expects to roll out trading “within a week,” with the first trade tentatively involving a Bitcoin trade. The exec also said that Pure Digital is not worried about collaborating with banking institutions, expressing confidence that the bank’s contribution is important for the industry’s adoption. “The crypto market needs banks, I don’t think it can scale without them,” he stated.
Related:Goldman Sachs’ crypto trading desk expands to Ether
The latest news marks another milestone for cryptocurrency adoption by financial institutions in the United States, with both BNY Mellon and State Street becoming increasingly engaged in the industry. After announcing crypto custody plans in February, BNY Mellon continued moving into crypto, last week becoming an exchange-traded fund service provider for major crypto asset manager Grayscale Investments.
State Street is known for its digital currency collaboration with Winklevoss’ Bitcoin exchange Gemini. Last month, the bank launched a dedicated digital finance division focusing on cryptocurrency, blockchain technology and central bank digital currencies.
Multi-trillion dollar asset manager, State Street Corporation, has become the latest financial institution to announce the launch of a dedicated digital finance division.
State Street, the second-oldest continually operating bank in the United States, announced the move on Thursday, June 10, highlighting the division’s focus on cryptocurrency, blockchain technology, central bank digital currencies (CBDCs), and tokenization.
”The financial industry is transforming to a digital economy, and we see digital assets as one of the most significant forces impacting our industry over the next five years,” asserted State Street CEO and chairman, Ron O’Hanley. He added:
“Digital assets are quickly becoming integrated into the existing framework of financial services, and it’s critical we have the tools in place to provide our clients with solutions for both their traditional investment needs as well as their increased digital needs.”
The firm’s head of global markets, Nadine Chaker, will head the division and report its operations to COO Lou Maiuri. “State Street has a major role to play in the evolution of digital market infrastructure,” said Chaker.
The company hopes to expand its proprietary GlobalLink technology into a platform supporting multiple digital assets, including peer-to-peer functionality.
State Street currently boasts $3.6 trillion worth of assets under management and $40.3 trillion in custodied assets, and is the second major global custodian to launch digital asset services, following in the footsteps of BNY Mellon.
Related:$157B Victory Capital plans to enter crypto market
The creation of the new division is not State Street’s first foray into digital assets, with the firm having been appointed as the administrator of a German Bitcoin-backed exchange-traded note (ETN) from Iconic Funds in April. That same month, the firm invested in a $30 million Series B round for blockchain-based fintech and regtech firm, Securrency.
State Street was also named as administrator and transfer agent for a Bitcoin exchange-traded fund (ETF) proposed by VanEck in the United States during March. The firm also teamed up with Gemini in 2019 to trial automated reporting services for its custody customers.
State Street is doubling down on the digital assets boom.
State Street Adds to Crypto Rush
State Street is launching a new unit focused on cryptocurrencies.
The banking giant, which holds over $40 trillion in assets under custody, announced it would be opening a new division called State Street Digital in a Thursdaypress release.
It’s set to be led by executive vice president Nadine Chakar, who will report to State Street Corporation’s chief operating officer Lou Mairui. Chakar commented on the growth of the digital assets space, asserting that the firm is well-positioned to capture a part of the market. She said:
“State Street has a major role to play in the evolution of digital market infrastructure and this new division will help us bring our expertise and resources to the conversation. As digital currencies and tokenization not only gain momentum, but transform financial infrastructure and operating models, we can help our clients bridge the gap between the industry of today and the one of tomorrow.”
Per the press release, the bank will expand on its capabilities in crypto, blockchain, central bank digital currencies, and tokenization by evolving its GlobalLink offering into a digital multi-assets platform.
State Street has already dipped its toes into crypto: in April, Crypto Briefing reported that the company’s trading technology provider, Currenex, would be providing crucial infrastructure to a trading platform called Pure Digital. Still, the launch of a digital assets arm is a major move that affirms the bank’s belief in the future of cryptocurrencies.
State Street is America’s second-oldest bank, and it’s not the first institutional player to add to the crypto boom in recent months. The investment management firm follows the likes of Goldman Sachs, Morgan Stanley, and BNY Mellon to jump into crypto amid growing mainstream interest in the space.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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State Street has added a Bitcoin sentiment tool to its series, which will analyze and quantify Bitcoin media coverage for investors.
Investment services company State Street Corporation has announced the launch of its Bitcoin Thematic Indicator series, a tool that quantifies the prevalence and sentiment of media coverage around Bitcoin.
“Over the last few months, media coverage around Bitcoin has grown significantly relative to corporate, financial and economic media markets and continues to trend higher,” Rajeev Bhargava, head of the Investor Behavior Research Team at State Street Associates, said in the announcement. “Our newest Bitcoin series provides a quantitative and timely measure of the tone and intensity of media discussion and reveals additional transparency into this highly sentiment driven market, enabling our clients to make more informed investment decisions.”
State Street launched its MediaStats Thematic Indicators platform in November 2020. The platforms indicators comb through hundreds of thousands of digital information sources and generate daily sentiment indicators on a wide selection of assets to paint a more accurate picture of the markets for interested investors.
The Bitcoin indicator will focus on collecting and collating data about Bitcoin, its connections to traditional currencies and emerging trends. And with the recent surge in Bitcoin popularity and adoption, there is no shortage of investors who seek the information to be supplied by such an indicator.
The addition of this indicator by State Street reveals another financial firm that is interested in capitalizing on Bitcoin’s growing popularity and adoption, and one that wants to help its clients do so as well.
U.S second-oldest bank State Steet is set to provide infrastructure for a crypto trading platform for banks. This has led to speculations that the bank could foray into crypto trading in the coming months.
State Street Providing Infrastructure for Crypto Trading Platform
It wasrevealedon April 8 that Currenex trading technology, a subsidiary of State Street, was working with London firm Pure Digital to create an institutional-based digital currency trading platform. The trading platform is part of the partnership between the two firms to explore the digital currency space. The trading platform expected to launch later in the year will offer institutions a regulated environment to trade cryptocurrencies.
Unlike a traditional crypto exchange, the trading platform is expected to be an over-the-counter exchange for banks. This is in line with the plan to integrate a forex exchange infrastructure into the crypto space using Forex industry-standard APIs and systems. The trading platform will offer bilateral credit lines, and banks will know who they are transacting.
It is understood that several banks could utilize the platform for trading purposes, including State Street bank. A statement from a spokesperson for the U.S bank revealed that the bank was currently evaluating the trading platform’s use.
David News, head of Execution Services for State Street Global Markets, spoke on the development. “Currenex is thrilled to leverage our experience and expertise in the FX and digital asset trading marketplace to provide Pure Digital with robust technology and infrastructure for this exciting digital currency trading initiative,” he said.
Institutions Slowly Moving to Cryptocurrency
Institutions in the financial sector are slowly but surely moving towards cryptocurrencies. The current bullish run appears to be driven by institutional adoption, unlike that of 2017 that retail investors drove.
Financial giants likeBNY Mellon, Morgan Stanley, and Goldman Sachs have all made significant moves in recent months. Payment processing platforms are not left behind, with PayPal,Mastercard, and Visa offering different crypto services.
This is great news for the cryptocurrency space that was largely seen as a hub for criminals and shady financial activities. State Street offering cryptocurrency services will be a major plus for the cryptocurrency sector. It remains to be seen if the bank will venture into cryptocurrencies in the coming weeks.
State Street’s Currenex will help Pure Digital build a cryptocurrency trading platform. It’s due to launch in 2021.
State Street has plans to “explore” crypto space and may begin trading on the platform.
The bank joins BNY Mellon, Morgan Stanley and others in making a move towards adopting crypto.
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The United States’ second-oldest bank, State Street, is just the latest to join the crypto boom.
State Street Makes Crypto Play
The company’s trading technology provider, Currenex, will be providing infrastructure for a new crypto trading platform called Pure Digital.
According to the press release, Pure Digital “will be a fully automated, high throughput OTC market for digital assets and cryptocurrencies with physical delivery and bank custody.” It’s set to launch in mid-2021.
DavidNewns, Global Head of Execution Services for GlobalLink, State Street Global Markets, said of the update:
“Currenex is thrilled to leverage our experience and expertise in the FX and digital asset trading marketplace to provide Pure Digital with robust technology and infrastructure for this exciting digital currency trading initiative.”
Pure Digital will be multi-custodial, and there’ll be a “smart custody routing mechanism” for those who opt to trust the platform with their crypto.
Many crypto services such as Coinbase target institutional investors with custody solutions. The custodial and Over-the-Counter offering suggests that Pure Digital will primarily focus on the institutional market rather than retail.
“Institutionalparticipants will trade on the platform utilizing bilateral credit enabling efficient capital utilization and control for all trading participants,” the statement from State Street said.
Institutional Shake-Up
Institutions will be able to use bilateral credit, something Bitcoin veteran Caitlin Long raised concerns about. “BEWARE: FRACTIONAL RESERVE BITCOIN IOUs coming,” she wrote on Twitter today. “Won’t end well for the banks.” Bilateral credit involves two organizations, usually banks, extending their credit limit with one another over a set time period. This allows one bank to borrow more than the credit limit since the second bank still has a debt to pay them.
The announcement also suggests that State Street is taking a long-term view on the crypto space. Campbell Adams, the founder of Pure Digital, said that the two companies “share the same vision for the future of the digital currency market.” The release notes suggest that they have plans to “further explore” the space.
It’s not yet clear to what degree State Street will be involved in the platform, but the focus on institutions suggests that it could commence trading and custodial services.
State Street wouldn’t be the first major institution to adopt crypto. BNY Mellon announced it would be launching a crypto custody service in February, while the 169-year-old insurance firm MassMutual made a $100 million Bitcoin purchase towards the end of last year.
Most recently, Morgan Stanley and Goldman Sachs have shared their plans to offer Bitcoin to wealthy clients.
State Street manages over $3 trillion in assets.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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State Street, the second-oldest operating bank in the United States, is moving into the cryptocurrency industry by agreeing to provide its technology for a new crypto trading platform.
Currenex, a forex technology provider owned by State Street, has entered into an agreement with crypto firm Puremarkets to provide its trading infrastructure and tech for the new crypto trading platform Pure Digital. Announcing the news Thursday, Pure Digital said that it will also collaborate with State Street to further explore the digital currency trading industry.
According to the announcement, Pure Digital will be a fully automated over-the-counter market for digital assets and cryptocurrencies with physical delivery and bank custody. Scheduled for launch in mid-2021, the new platform will reportedly allow institutional investors to trade using bilateral credit and multiple custody solutions. “Trading participants will be free to leverage their preferred digital asset custody solutions and manage risk through a smart custody routing mechanism,” the announcement notes.
State Street announced in late March that the bank has been exploring the role of Bitcoin (BTC) in multi-asset portfolios over the last nine years. “The case has yet to be made for Bitcoin as an equity hedge, though it may be heading in that direction. The key for investors is to combine their preferences for risk mitigation and upside potential with Bitcoin’s expected diversification and return properties to determine their optimal allocation,” the bank wrote.
State Street has been actively exploring the cryptocurrency industry in recent years. In late 2019, the bank announced a digital asset pilot in collaboration with Gemini Trust Company. The pilot built on the research and development in the digital asset space to combine Gemini Custody with State Street’s back-office reporting.
Earlier this year, Bank of New York Mellon announced plans to hold, transfer and issue Bitcoin and other crypto as an asset manager on behalf of its clients.
