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Boston-based custodian bank State Street has announced that it will be collaborating with crypto exchange Gemini to develop a pilot for digital asset holders. The pilot in question is designed to provide reporting scenarios on a user’s holdings within Gemini, a press release said.
The initial phase will involve the evaluation of two cryptocurrencies chosen specifically for liquidity reasons. Once the pilot proves successful, more cryptocurrencies will be added to the system.
Ralph Achkar, managing director of Digital Product Development & Innovation at State Street, said that the custodian firm aims to develop its business parallel to what its clients need. And since digital assets are seen to be the next big thing in the financial sector, State Street is gearing up for this inevitable transition.
A growing demand
“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,” Achkar said.
This announcement comes in the wake of State Street axing over 100 of its developers earlier this month as it moved on from its initial plans to create a digital ledger technology restructuring. Sources familiar with the situation said that the custodian bank is focusing its effort on digital assets and it appears that this is the product of that endeavor.
Increasing interests by institutional investors
State Street released a comprehensive report last week saying that digital assets aren’t just here to stay but are expected to grow in the coming years. The firm conducted a survey and found that the majority of participants have plans to expand their current digital assets, a sign that interests among institutional investors are only growing stronger.
Gemini CEO Tyler Winklevoss said that this State Street partnership is a “major milestone” for the crypto exchange.
“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,” Winklevoss said.
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