Sarah Tran
Independent Analyst
- State Street will be building a new digital asset trading desk for institutional clients.
- The second-oldest bank in the US will consider trading crypto using the platform it is building with Puremarkets.
- The banking giant joins an influx of new institutions getting into the crypto space.
The second-oldest bank in the United States is joining the cryptocurrency industry by creating a new institutional-grade digital asset platform to trade crypto.
State Street to explore crypto trading industry further
State Street will provide the infrastructure for a new bank-grade trading platform for Bitcoin and cryptocurrencies, aiming to launch mid-year. The bank could eventually use the platform for trading cryptocurrencies itself.
With $3.1 trillion in assets under management, State Street previously announced in late March that it has been exploring the role of Bitcoin in multi-asset portfolios in the last nine years. Although the firm stated that the case has yet to be made for the pioneer cryptocurrency as an equity hedge, it believes “it may be heading in that direction.”
Foreign exchange technology provider Currenex, owned by State Street, has signed an agreement with crypto company Puremarkets to provide new technology and infrastructure for the crypto trading platform – Pure Digital.
The new digital asset platform, Pure Digital, will allow institutional investors to trade using bilateral credit and multiple custody solutions. Pure Digital will collaborate with State Street to explore the cryptocurrency trading industry. The founder of Pure Digital, Campbell Williams, said:
Pure Digital is pleased to explore the digital asset space with State Street as we share the same vision for the future of the digital currency market.
According to the official announcement, the crypto trading platform will be a fully automated over-the-counter (OTC) market for cryptocurrencies with physical delivery and bank custody.
State Street has been investigating the crypto industry for a while, having announced a digital asset pilot in collaboration with Gemini in 2019. The pilot included the tracking of a reporting process for Bitcoin and Ether that are held for a user in Gemini’s custody service.
The trial would allow investors to consolidate the reporting of cryptocurrencies stored in Gemini, while traditional assets would be serviced by the banking giant. In 2019, State Street revealed that 38% of its clients planned to increase their crypto holdings the following year.
Banking giants have recently been exploring the crypto industry, including the oldest bank in the United States. BNY Mellon announced that it will launch a new cryptocurrency custody unit later this year to support their clients’ digital asset transactions. Goldman Sachs and Morgan Stanley have also made moves to offer Bitcoin-related products for their clients.
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