One of America’s longest-running financial services and bank holdings company State Street is yet to introduce cryptocurrency custodian services, and here is why.
The cryptocurrency regulations in America may be obscure at large but have the security at heart, especially when it comes to safeguarding digital assets from theft and misuse. Thus, to some, it may come off as a real shocker to know that the country’s oldest and largest custody bank has not ventured into cryptocurrency yet – an asset that needs just as much protection as a fiat currency and mainly been gaining traction for being known as the new-age currency.
Cryptocurrency custodian services not in the pipeline yet
State Street, as a result, finally decides to break the silence. In conversation with The Block was Jay Biancamano, the person-in-charge of the Digital Product Development at State Street, who spilled the beans on why the largest custody banks in the world in yet to consider launching a service to store crypto assets.
The managing director at the Boston-based firm, and a 25-year plus financial services veteran shared his insight into the whole Bitcoin custody business and firm’s future strategies.
On being asked how interested is the firm in, what is being termed as one of the most significant innovations of this decade, Bitcoin, Jay mentioned that the firm is more inclined towards Bitcoin’s underlying technology, which is blockchain, rather than concentrating on just the asset. He states that the custody bank is willing to explore the opportunities presented by blockchain and tokenization and see what they can bring to the table.
And while he ascertains that the firm does not dismiss the idea of cryptocurrency custodian services, it isn’t part of the plan yet. Our focus is on evaluating the market trends and determining whether it is ready to make the shift overnight. Cryptocurrencies, although not the discussion at this point, is a small portion of the bigger picture, he confirms.
Given the buzz generated by the cryptocurrency space, Jay specifically points out although specific tokens like the utility tokens are entirely out of scope, cryptocurrencies will be a part of the company’s future strategy.
Clientele isn’t ready to make the jump
He also elaborates on why hasn’t the firm ventured into the digital asset space yet. According to him, the reason is the clientele. It is not because we don’t want to, but because the client isn’t ready to make the jump yet, he adds. Despite the fact that things move quickly in the cryptocurrency domain, he feels, the regulatory landscape has not been able to keep up with speed yet. Quality of the services will need to be at par with clients’ expectations; otherwise it just doesn’t serve the purpose, Jay furthers.
As far as State Street’s plans are concerned, Jay explains that the primary focus remains client interests. And whether they are in digital assets or traditional, the firm will continue to serve their needs. We are open to suggestions and feedback, as it is part of the learning curve. If we feel that our clients want to move their focus to digital space, the firm will do what it takes to stay relevant, he affirms.