State Street is launching a new business unit called State Street Digital, covering cryptocurrency, central bank digital currency, blockchain, and tokenization.

Why should we care?
The launch of State Street Digital doesn’t mean State Street will be directly investing in crypto. Rather, its tools will support State Street clients in their efforts to invest in crypto. The new unit will reportedly include 400 to 450 staff members, and its capabilities will be folded into State Street’s proprietary trading platform. The objective, according to the bank, is to build a multi-asset platform to support crypto assets, along with other asset classes. State Street Digital is the latest among a series of initiatives launched by large financial institutions, including Fidelity and BNY Mellon, to support digital assets. “You can tokenize a building -- you can trade a fraction of it without selling a whole building,” Nadine Chakar, head of State Street Digital, said in a recent interview. The bank said it’s evaluating whether it will offer native wallet-management services down the road. In a statement, Ron O’Hanley, CEO of State Street, acknowledged that digital assets are becoming integrated into the “existing framework” of financial services. “It is critical we have the tools in place to provide our clients with solutions for both their traditional investment needs as well as their increased digital needs,” he noted.