TradFi Giant State Street Mulls Creating Stablecoin, Tokenized Deposits: Bloomberg

State
Street,
a
Boston-based
asset
management
and
banking
giant,
is
exploring
creating
stablecoins
and
tokenized
deposits
to
settle
transfers
on
blockchain
rails,
Bloomberg

reported
Wednesday
citing
a
source
familiar
with
the
matter.

The
bank
also
weighs
participating
in
“digital-cash
consortium
efforts”
and
is
“looking
at
settlement
options”
via
Fnality
International,
a
fintech
firm
in
which
State
Street
has

invested
according
to
the
report.

The
report
comes
as
State
Street
is
increasing
its
presence
in
the
digital
asset
space.
State
Street
Global
Advisors,
the
investment
management
arm
of
the
company,
also
inked
a
deal
with
crypto
investment
firm
Galaxy
(GLXY)
to
develop
crypto
trading
products,
CoinDesk

reported
in
late
June
based
on
regulatory
filings.

The
Information
reported
early
last
month
that
State
Street
was
rebuilding
its
digital
asset
division
only
six
months
after
cutting
the
team,
with
plans
for
offering
crypto
custody
services.

Traditional
finance
heavyweights
are
getting
increasingly
involved
in
tokenization
of
traditional
financial
assets,
or
real-world
assets
(RWA)
by
placing
bonds,
funds
or
credit
on
blockchain
rails.
They
do
so
to
gain

operational
benefits
such
as
increased
efficiency,
faster
and
around-the-clock
settlements
and
lower
administrative
costs.

Stablecoins
are
blockchain-based
cryptocurrencies
with
a
pegged
price
to
an
external
asset.
Most
stablecoins
are
pegged
to
the
U.S.
dollar
and
are
widely
used
as
a
tokenized
version
of
cash.

Asset
management
giant
BlackRock,
which
now
offers
the
largest
spot
bitcoin

(BTC)
exchange-traded
fund,
introduced
its
first
tokenized
money
market
fund
on
the
Ethereum

(ETH)
network
with
several

decentralized
finance
(DeFi)
protocols
building
on
it.
Global
bank
JPMorgan
developed
its
private
blockchain
Onyx
with
its
JPM
Coin,
a
private
digital
version
of
the
U.S.
dollar.