According to a statement on Tuesday, State Street, where more than $ 32 trillion in client assets are being held and nearly $ 3 trillion in managed assets. State Street said the trial, “the first of its kind,” will test reporting scenarios for digital assets.
State Street Corp is partnering with a cryptocurrency company Gemini Trust founded by the Winklevoss twins to make it easier for customers to keep track of cryptocurrency holdings with their traditional investments.
The final effort of the trial aims to allow investors to consolidate digital asset reporting hosted at Gemini with traditional assets served by State Street.
The trial will track the reporting process for bitcoin and ether held for users in Gemini’s custodial service. According to a press release, cryptocurrencies were chosen for liquidity reasons, but other digital assets could be added to the system, including encrypted securities.
State Street still gains money for cryptocurrency, under the pilot project with the Winklevoss twin’s Gemini Trust Co. LLC. However, it will allow customers to consolidate their crypto-asset reporting with other types of investments. Gemini – a supervisor, established to hold digital assets – will protect their cryptocurrency. State Street will protect their other properties. But two types of assets can be reported together, in one place.
The announcement came after State Street said 38% of its customers planned to increase their digital asset ownership by 2020. As a result, the bank is focusing on digital assets. In the future, it has recently cut its blockchain activity with the loss of around 100 related development jobs.
Managing director of Digital Product Development and Innovation at State Street, Ralph Achkar, stated:
“There is a small but growing demand from our customers for these types of solutions and many technical, operational, regulatory and legal considerations are addressed.”
“That’s why we chose an open model and started experimenting with Gemini as an established, regulated player in the digital asset space,” he added.
State Street has acted as the custodian of the US dollar corresponding to the Gemini stablecoin (GUSD). Tyler Winklevoss, CEO of Gemini, said: “With trillions of dollars of assets under management, State Street will never compromise on security – and neither do we.”
State Street is researching “a number of proof of concepts,” Jay Biancamano, executive director of digital and development products of State Street, said in a podcast episode of The Scoop.
What is State Street?
Boston-based State Street is one of the largest custodian banks in the world, but it does not hold cryptocurrencies like bitcoin and ether for the large institutional investors that make up its customer base. Like other financial services giants, it has expressed interest in cryptocurrencies but proceeded with caution in the space.
This is the second US bank in the list of the oldest banks in continuous operation; Its predecessor, Union Bank, was founded in 1792.
The company is named after State Street in Boston, which was called “Great Street to the Sea” in the 18th century when Boston became a flourishing maritime capital. The company’s logo included a clipper to reflect the maritime industry in Boston during this period.
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