Categories: Blockchain

State Street Said to Explore Creating Stablecoin, Deposit Token

Financial services and banking giant State Street Corp. is exploring ways to get involved in settling payments on blockchain, according to a person familiar with the matter.

The Boston-based asset manager, which reported higher-than-expected revenue and interest income on Tuesday, is exploring creating its own stablecoin — a cryptocy that runs on a blockchain and is pegged to an asset such as the dollar. It’s also considering creating its own deposit token, which would represent customer deposits on a blockchain, according to the person, who asked for anonymity because the work hasn’t been made public. A State Street spokesperson declined to comment. 

State Street is also evaluating joining digital-cash consortium efforts and is looking at settlement options through its investment in Fnality, a blockchain payment startup that’s expanding into the US, the person said. A spokesperson for the company declined to comment.

The crypto industry has long said that using blockchain — a digital ledger — can make payments move around the world faster and cheaper. A number of traditional financial companies have already stepped in to provide crypto settlement: PayPal introduced its own stablecoin last year, and card networks Visa and Mastercard already enable stablecoin-based settlement. US’s biggest bank, JPMorgan Chase & Co., is exploring deposit tokens.

Introduction of a deposit token by State Street would require approval from US banking regulators.
State Street has already been stepping up its digital-asset efforts. Earlier this year, it integrated its digital-assets focused team members into its overall business, as it wants tighter integration between traditional finance and digital assets. As the third-largest exchange-traded fund manager, State Street is already providing services like fund-administration and accounting for crypto ETFs. And it’s further expanded its digital-asset efforts recently via a partnership with Galaxy Asset Management to develop digital assets ETFs.
Terron Gold

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