State Street, a Boston-based asset-management firm “responsible for more than 10 percent of the world’s assets,” announced on Tuesday it has teamed up with cryptocurrency platform Gemini to launch a new digital asset pilot, which notably builds on ongoing research and development in the digital asset space to combine Gemini Custody with State Street’s back-office reporting.
“We want to evolve our business with our clients’ needs. The digital asset space is still nascent, yet it promises opportunities that could fundamentally impact how we do things in the future. 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. 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.”
Tyler Winklevoss, CEO of Gemini, also commented:
“Working with State Street is a major milestone for Gemini and digital assets as a mainstream asset class. With trillions of dollars in assets under management, State Street will never compromise on security — and neither will we. 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 collaboration with Gemini comes just after State Street reportedly abandoned an internal project that aimed to put its investment book front end, accounting middleware and back end custody records onto a blockchain-like self-settling layer. A source revealed that the company has become “more focused on digital assets, stablecoins, custody, and the USC initiative [the Utility Settlement Coin being developed by bank consortium Fnality].”
Ralph Achkar, Managing Director of Digital Products at State Street in London, also confirmed the layoffs and said that the changes came about when State Street decided to outsource DLT (distributed ledger technology) services:
“I think the choice in approaching that space was, do we need to have all of these resources internally, or can we actually build partnerships and work with other providers in the market?”