State Street Corporation, an institutional asset manager with over $4.1 trillion in assets, intends to provide custodial services for bitcoin and other cryptocurrencies, according to an interview given to Bloomburg.
Nadine Chakar, executive vice president and head of State Street Digital, alluded to the added pressure of regulatory hurdles presented by being a Globally Systemically Important Financial Institution (G-SIFI). These particular institutions are asset managers whose failure could trigger major economic events.
“We think a custodian bank like State Street can continue to do what it’s best at, which is keeping order and safety into the system. But we’ll do it differently,” referring to their status as a G-SIFI, and being the largest custodian in the world.
“It’s my personal mission to prove that elephants can truly dance,” referencing comments that the size of State Street is too big to fail. “The minute we get the nod, we’ll be ready,” Chakar told Bloomberg. “We’re literally investing in the future, we know clients are out there looking for this.”
Chakar spoke to the volatility of bitcoin and other cryptocurrencies saying that further institutional adoption will create a more stable environment, citing one of the reasons she believes State Street can provide this stability is the market would “take comfort” from custodial solutions offered from a G-SIFI of their size.
In December 2019, State Street launched a custodial pilot that was meant to combine the custodial services of Gemini, a cryptocurrency exchange, and the reporting services of State Street.
In June of 2021, State Street launched a digital division, led by Chakar. Joining the growing list of institutional adoption, including Fidelity and their recent “Bitcoin First” initiative, Ron O’ Hanley, CEO of State Street had this to say on digital assets:
“The financial industry is transforming to a digital economy, and we see digital assets as one of the most significant forces impacting our industry over the next five years.”