On August 20, State Street announced a partnership with Swiss crypto company Taurus to launch a digital asset platform aimed at institutional clients, managing $4.4 trillion in assets.

This collaboration is designed to meet the increasing demand for digital asset solutions among institutional investors.

The new service will include tokenization, which transforms real-world assets into tradable digital tokens, alongside crypto custody for secure storage of digital assets.

State Street will leverage Taurus's technology, utilizing products like Taurus-PROTECT for custody and Taurus-CAPITAL for asset management.

In addition to crypto fund administration and accounting, State Street will assist clients in creating tokenized assets such as funds and securities.

The bank aims to automate the issuance and servicing of digital assets, including digital securities and fund management vehicles.

Donna Milrod, State Street's chief product officer, emphasized the company's commitment to enhancing digital asset capabilities and providing innovative solutions.

Plans for offering crypto custody services are contingent upon the SEC revising its 2022 accounting guidance, which currently imposes high costs for banks storing crypto assets.

State Street will utilize Taurus's products, including Taurus-EXPLORER, which offers blockchain connectivity across various protocols.

While fund tokenization presents management, legal, and regulatory challenges, it offers benefits such as lower costs and improved portfolio diversification for investors.

Institutional interest in digital assets has surged following the launch of several spot Bitcoin and Ethereum exchange-traded funds, with major financial institutions investing heavily in these products.

The tokenized US Treasury securities market has also seen significant growth, driven by key players like BlackRock and Franklin Templeton.