According to a report, State Street has taken a serious interest in blockchain settlement technology. The global asset manager has been moving slowly into the crypto space, but it may be making a big leap soon.

An unnamed Bloomberg source said State Street is considering creating its own stablecoin and deposit token. In addition, it may leverage its investment in UK-based payment startup Fnality to create new settlement options and join “digital-cash consortium efforts.”

Corporate stablecoin, deposit tokens have a solid precedent

State Street is not blazing new trails in blockchain settlement. JPMorgan launched its Onyx blockchain and stablecoin and the JPM Coin in 2020 . Goldman Sachs began trading digitized bonds on the chain the following year. JPMorgan introduced a tokenization platform called the Tokenized Collateral Network in 2023 and added a programmable payments feature months later.

Related: Swiss Bankers Association proposes deposit tokens to develop digital economy

Deposit tokens — digital representations of bank deposits — were pioneered within Project Guardian, the massive asset tokenization project initiated by the Monetary Authority of Singapore in 2022. JPMorgan was a founding member of that project and has developed the technology for its own use.

PayPal introduced the PayPal USD (PYUSD) stablecoin in August. BlackRock began asset tokenization with a digital liquidity fund in March.

State Street eyes blockchain leap with stablecoin, deposit token: Report image 0 Source: Olga Sharif

State Street bullish on crypto ETFs

State Street created a dedicated digital finance division in 2021. That division later saw layoffs, but was revived and integrated into the main business this year. State Street participated in a securities  transaction settlement trial with the Depository Trust and Clearing Corporation (DTCC) and other financial institutions in 2022.

State Street serves as the fund administrator for several Bitcoin ( BTC ) exchange-traded funds (ETFs). Galaxy Digital is one of the ETF providers it services, and the two firms have agreed to pursue the creation of new digital asset ETFs together.

It has applied to the US Securities and Exchange Commission to add the SPDR Galaxy Emerging Technology Enablers ETF, SPDR Galaxy Digital Asset Ecosystem ETF and Hedged Digital Asset Ecosystem ETF to its extensive lineup of funds.

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