One of America's oldest banks is eyeing the latest technology in a bid to appeal to clients.
Boston-based State Street Corp. announced Tuesday that it's partnering with cryptocurrency exchange and custodian Gemini Trust on a new pilot that examines reporting scenarios for digital assets.
The trial will track a reporting process for bitcoin and ether that are held for a user in Gemini's custody service. The cryptocurrencies were chosen for reasons of liquidity, according to a press release, but other digital assets can be added to the system, including tokenized securities.
Claimed to be the first trial of its kind, the effort is ultimately aimed to allow investors to consolidate the reporting of digital assets stored at Gemini with traditional assets serviced by State Street.
"With trillions of dollars in assets under management, State Street will never compromise on security – and neither will we," said Gemini CEO Tyler Winklevoss. "Traditional investors will more seamlessly be able to allocate capital in their portfolio to digital assets through trusted and regulated financial institutions — helping us build a better bridge to the future of money."
The announcement comes soon after State Street said 38 percent of its clients planned to increase their holdings of digital assets in 2020. As such, the bank is focusing on digital assets going forward, having recently cut back on its blockchain work with the loss of around 100 related development jobs.
“There is small, but growing demand from our clients for solutions of this type and many technical, operational, regulatory, and legal considerations to be addressed," said Ralph Achkar, managing director of Digital Product Development and Innovation at State Street. "That is why we have opted for an open model, and started a pilot with Gemini as an established, regulated player in the digital asset space.”
The two firms already have a business relationship, with State Street acting as the custodian of the dollar collateral backing Gemini's GUSD stablecoin.
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