TLDR:
State Street partners with Taurus to enhance digital asset services
Collaboration aims to offer tokenization and digital custody solutions
Partnership leverages Taurus’ products: Taurus-Protect, Taurus-Capital, and Taurus-Explorer
State Street to automate issuance and management of digital assets
Digital custody services subject to regulatory approval
State Street, a leading global financial services provider, has announced a strategic partnership with Taurus, a digital asset infrastructure company. The collaboration aims to enhance State Street’s digital asset services by introducing tokenization and digital custody solutions to its existing fund administration and accounting capabilities.
State Street, which manages $44.3 trillion in assets under custody and/or administration as of June 30, 2024, is leveraging this partnership to strengthen its position in the growing digital asset market.
The company will utilize three of Taurus’ products: Taurus-Protect, Taurus-Capital, and Taurus-Explorer. These tools will enable State Street to streamline the process of creating and managing tokenized assets throughout their lifecycle and provide blockchain connectivity to various protocols.
Donna Milrod, State Street’s chief product officer and head of Digital Asset Solutions, emphasized the company’s commitment to establishing itself as a leader in the digital asset space. The partnership with Taurus is expected to enhance State Street’s ability to deliver innovative solutions to its clients.
The collaboration comes at a time when institutional interest in digital assets is increasing. State Street’s move to expand its digital asset capabilities reflects the growing demand for such services among its clientele. The company aims to provide a comprehensive digital platform that supports the entire digital investment lifecycle.
Taurus, a Swiss-based company specializing in serving large financial institutions, will play a crucial role in this partnership. Subject to regulatory approvals, State Street will leverage Taurus’ integrated custody, tokenization, and node-management solutions to automate the issuance and servicing of digital assets, including digital securities and fund management vehicles.
The partnership will allow State Street to offer new services such as turning real-world assets into tradeable tokens. This process, known as tokenization, involves converting ownership rights to traditional assets into digital tokens on a blockchain.
Proponents of tokenization argue that it makes assets easier to trade due to enhanced transparency and security provided by the blockchain’s consensus mechanism.
State Street’s expansion into digital asset services aligns with the broader trend of traditional financial institutions entering the cryptocurrency and blockchain space.
As cryptocurrencies have become more prevalent in the financial system through regulated products like futures and exchange-traded funds, they have attracted increased interest from institutions seeking ways to hedge against inflation and diversify their portfolios.
State Street’s plans to offer crypto custody services are subject to regulatory approval. The company is waiting for the U.S. Securities and Exchange Commission (SEC) to revise its 2022 accounting guidance, which currently makes it extremely expensive for publicly listed banks to store crypto for their customers.
In the meantime, State Street is focusing on tokenization services, with plans to announce its first tokenization client soon. The company is prepared to roll out full crypto custody services once the regulatory environment in the United States becomes more favorable.
State Street’s partnership with Taurus is not its first venture into the blockchain and digital asset space. The company has previously collaborated with crypto custody firm Copper.
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