State Street Corporation, a financial services and banking company, is considering the launch of a stablecoin and a deposit token in the context of applying blockchain in payment settlement. Citing an anonymous source privy to the information, the Boston-based asset manager wants to use blockchain to improve the speed and efficiency of cross-border payments.
State Street Eyes Stablecoin & Token Launch
State Street is currently assessing various options to improve its blockchain payment services. One of the main strategies includes the possibility to launch a stablecoin, a cryptocurrency backed by a certain asset like the US dollar.
The company is also planning to issue a deposit token that records customer deposits on the blockchain. These are some of the plans that State Street has embarked on as it seeks to offer digital assets services.
Furthermore, State Street is looking into joining digital-cash consortiums and exploring settlements through its investment in Fnality, a blockchain payment company that is branching out into the US market. Although a representative of State Street did not respond to these events, the company’s further engagement in the blockchain sphere proves its intentions to enhance its digital assets’ management.
Increasing Digital Asset Integration
State Street has been gradually expanding its offerings and incorporating digital assets into its operations. This year, the company had to combine the team that deals with digital assets with the one that deals with traditional finance to enhance the cooperation between the two sectors.
This decision is in harmony with State Street’s strategic goal to combine financial service traditionally associated with banking and innovative technical solutions of the digital assets sphere.
In this regard, the company has already achieved much. Being the third largest ETF manager, State Street offers fund administration and accounting to crypto ETFs. In addition, it has recently signed an agreement with Galaxy Asset Management for launching digital asset ETFs, which strengthens its presence in the digital asset market.
Regulatory Considerations
If State Street were to introduce a deposit token it would require the approval of the US banking regulators. This again shows that the integration of the blockchain technology into the conventional Financial System is a challenge. Stablecoins, on the other hand, face a challenge of having no federal regulatory framework in the US.
Reps. Maxine Waters and Patrick McHenry are currently drafting a federal bill to address the issue of stablecoin regulation. At the same time, the Senate is also working on stablecoin legislation.
In the past, the US Securities and Exchange Commission (SEC) Chairman Gary Gensler compared stablecoins to securities, specifically money market funds. Nevertheless, the SEC has recently closed the investigation into Paxos related to the Binance USD stablecoin, which can be an opportunity for further stablecoin integration. Moreover, earlier in the month Paxos secured Singapore’s approval to issue stablecoins. as reported by Coingape.
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The post Breaking: State Street Eyes Stablecoin & Token Launch appeared first on CoinGape.
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