State Street Launches Digital Finance Unit for Crypto

America’s second-oldest bank looks to cement spot in future.


State Street CEO Ron O’Hanley


key takeaways

  • State Street CEO Ron O’Hanley has labeled digital assets as “a trend that’s here to stay.”
  • New division to expand capabilities to include crypto, CBDC, blockchain, and tokenization.

State Street, a custody bank that oversees $40 trillion in assets, has launched a new division focused on the shift to digital finance.

CEO Ron O’Hanley said in a statement that he expects digital assets to be one of the most significant forces impacting financial services over the next five years, noting that it is critical to have tools in place as it becomes integrated into the industry’s existing framework.

“As the financial industry is transforming to a digital economy with decentralized finance, digital currencies and tokenization will only continue to gain momentum,” a spokesperson told Blockworks. “The custodians of the future will evolve from recordkeepers and intermediaries to curating a digital ecosystem based on data and intelligent technology offerings and data integration.”

Fintech and the pandemic have accelerated the unbundling and digitization of financial services, the representative added, which has led to the need for the industry’s operating models, technology platforms and service models to evolve.

O’Hanley had noted during State Street’s earnings call in April that the space was “a trend that’s here to stay.”

“We’re very active in thinking about how do we move from custody, something that’s physical or near physical to custodying a token, and what does that mean for us?,” he told analysts at the time. “So it’s a very, very important part of our [research and development], and it’s a very, very important part of our share online now.”

The new division, called State Street Digital, will focus on expanding its capabilities to include crypto, central bank digital currency, blockchain, and tokenization. State Street plans to upgrade its GlobalLink technology platform to support crypto assets and other asset classes.

Nadine Chakar will lead the unit. The 30-year industry veteran became the company’s head of global markets in 2019 after working for several years as global head of operations and data at Manulife Investment Management, according to her LinkedIn profile

Chakar brings deep experience in running custody and accounting businesses as well as operating asset manager back offices, a State Street spokesperson said. State Street Digital currently comprises about 425 global professionals, and the company anticipates adding roles in the coming months.

“We have been developing a number of digital capabilities and other solutions as well as partnering and investing in the infrastructure that forms the foundation of State Street Digital,” Chakar said in a statement.

The new department comes after the custody bank and asset manager has gradually stepped into the digital assets space in recent years. 

State Street in 2018 partnered with Lukka, a crypto reference data provider, to develop comprehensive digital asset fund administration services. Lukka recently named Kinga Bosse, State Street’s former global head of strategic investments and partnerships, as its chief financial officer. The custody bank also lent foreign exchange technology to institutional crypto trading platform Pure Digital earlier this year.

The financial services titan was also appointed in March as the fund administrator and transfer agent of the VanEck Bitcoin Trust, a proposed ETF that awaits to be greenlit by the Securities and Exchange Commission.

State Street CFO Eric Aboaf said during the April earnings call that the company could bring a level of credibility to the space as US regulators decide on whether or not to approve the various crypto ETFs in registration.

“We’ve got a strong pipeline of clients because these are, by and large, our clients who are innovating in crypto ETF,” he said. “We think that’s a real area of white space where we can lean in and both support our clients and also be a real important participant and player in one of the emerging spaces.”

BNY Mellon, the world’s largest custodian bank and oldest bank in the US, said in February it would store and move cryptocurrencies for its asset manager clients


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