State Street Explores Tokenized Bonds and Money Market Funds

CryptoNews.com · 2024-10-07T21:07:54+00:00

State Street is reportedly exploring tokenization for bonds and money market funds, citing practical uses in traditional finance. The firm is currently working on building tokenized collateral that could serve as initial margin in trading to eliminate the need for redemption. The company has expanded its involvement in the crypto sector and recently appointed a new head for its Digital Assets Solutions unit.

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2024-10-07 21:07:54

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State Street Tokenization

The firm’s decision to tokenize funds is driven by increasing industry recognition of its practical applications in traditional finance. Last updated:

October 8, 2024 01:07 EDT

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Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

October 8, 2024 01:07 EDT

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Donna Milrod, chief product officer at State Street, told Financial News that the firm is currently working on both projects.

Milrod shared that the firm is working on building tokenized collateral, which could serve as either variation or initial margin in trading. At present, firms must sell money market fund holdings to generate cash for trade margin. By digitizing these funds and using crypto tokens as collateral, the need for redemption could be entirely eliminated.

She also revealed that it has no immediate plans to launch a stablecoin or tokenize deposits. But it hasn’t ruled this out for the future. She added that the decision to tokenize funds is influenced by the growing industry recognition of its practical uses in traditional finance.

The firm didn’t return Cryptonews’ request for comment by press time.

State Street Names New Digital Assets Chief

The financial firm focuses on investment management, servicing and administration. Its division, State Street Global Advisors (SSGA), manages assets and is known for launching one of the first exchange-traded funds (ETFs). The company also provides custody, fund accounting and administration services, handling securities for institutional investors globally.

State Street has expanded its involvement in the crypto sector, forming partnerships to enhance its digital asset services. For instance, it teamed up with Swiss crypto firm Taurus to offer services like tokenizing tangible assets.

Recently, State Street appointed Vanessa Fernandes, formerly an at Bank of New York Mellon, to lead its Digital Assets Solutions unit.

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