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Boston-based global custodian bank State Street has reportedly let go of most of its developers in its blockchain strategy team. To put it briefly, the maneuver is apparently rooted in the complications and operational costs that the company will shoulder should it move ahead with its digital ledger transition.
Instead of doing the manual restructuring of its front and back end, State Street will be tapping tech firms to do the heavy lifting while it provides assistance if necessary. According to a source, the blockchain team has been severely gutted, with over 100 developers getting axed by the financial firm, CoinDesk reported.
A source that’s familiar with the situation said that State Street is moving away from the in-house digital ledger technology (DLT) restructuring and is focusing its efforts on “digital assets, stablecoins, custody, and the USC initiative [the Utility Settlement Coin being developed by bank consortium Fnality].”
State Street positions itself for the future
In late October, it was revealed that State Street is looking to dive into cryptocurrencies, with bitcoin the candidate that’s been heavily scrutinized. Managing director of digital product and development Jay Biancamano believes that traditional trading will eventually transition to the digital space. As such, they’re making the necessary preparations to position themselves in front of the next evolution of the trading industry, The Block reported.
But Biancamano did admit that their clients aren’t heavily involved in the crypto market at the moment. Regardless, State Street is priming itself for the transition and this recent development is a hint that it’s trying to accelerate its progress rather than split its effort with the aforementioned in-house restructuring.
Preparing for the inevitable
"You know we're intensely led by our clients, and our clients right now, the ones we deal with, are not investing in cryptocurrencies for a number of reasons. Obviously regulation has to do with it and custody is one piece of it," Biancamano said.
Ultimately, State Street aims to encourage clients to invest in traditional or digital assets. If the latter proves to overtake the former in the future, then the custodian bank will still be in a position to play with the big leagues.
