A financial service company from Boston, State Street Corporation is set to launch a stablecoin and a deposit token for the improvement of cross-border payment settlements through blockchain.
State Street is actively looking for ways to get involved in blockchain payment services. One of them is to issue a stablecoin, a cryptocurrency that is pegged to an asset such as the US dollar.
Also, the company intends to release a deposit token that tracks the customers’ deposits within the blockchain. These efforts prove that State Street is ready to provide digital asset services to its clientele, as reported by Bloomberg.
It is also considering becoming a member of digital-cash consortiums and conducting settlements through its investment in Fnality, a blockchain payment company that is venturing into the US market.
While it is not clear whether the developments are positive or negative, State Street’s continued involvement in the blockchain space signifies its desire to improve digital asset servicing.
State Street has slowly and steadily started incorporating digital assets into its business model. This year, the company integrated the team that was focused on digital assets with the finance team.
The third biggest ETF manager, State Street, provides fund administration and accounting to crypto ETFs. In the past year, the company collaborated with Galaxy Asset Management to introduce digital asset ETFs, which helped to expand the company’s position in the digital asset market.
However, introducing a deposit token would necessitate the approval of US banking regulators, which shows that incorporating blockchain technology into the existing financial system is not a walk in the park.
Stablecoins, on the other hand, are confronted with the challenge of having no federal regulation in the US—currently, Reps. Maxine Waters and Patrick McHenry are in the process of preparing a bill for the regulation of stablecoins, while the Senate is also working on legislation on this issue.
The SEC has recently concluded its investigation into Paxos related to Binance USD stablecoin, and this month Paxos has received approval for stablecoin issuance in Singapore suggesting potential for deeper integration.
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