State Street eyes creation of its own stablecoin and deposit token: Report

Key Takeaways

• State Street is considering creating its own stablecoin and deposit token for blockchain-based payments.
• Nearly half of institutions surveyed by State Street are ready to trade digital assets on blockchains.

State Street Corp. is exploring blockchain-based payment settlement options, including the creation of its own stablecoin and deposit token, as reported by Bloomberg. A person familiar with the matter told the report that the Boston-based asset manager is also evaluating joining digital-cash consortium efforts and examining settlement options through its investment in Fnality, a blockchain payment startup expanding into the US.

The move aligns with the crypto industry’s assertion that blockchain can facilitate faster and cheaper global payments. Several traditional financial companies have already entered the crypto settlement space, with PayPal introducing its stablecoin last year, and Visa and Mastercard enabling stablecoin-based settlements.

The report highlights that State Street’s consideration of a deposit token would require approval from US banking regulators. The company has been expanding its digital-asset efforts, recently integrating its digital-assets focused team members into its overall business to foster closer integration between traditional finance and digital assets.

As the third-largest exchange-traded fund (ETF) manager, State Street provides services like fund-administration and accounting for crypto ETFs. The company has also partnered with Galaxy Asset Management to develop crypto ETFs.

State Street’s recent digital-asset survey of 300 investment institutions revealed that nearly half of institutions are prepared to trade digital assets on and off distributed ledgers and blockchains, given the appropriate infrastructure.

According to Bloomberg, a State Street spokesperson declined to comment on the company’s exploration of stablecoins and deposit tokens.