State Street, one of the world’s largest asset managers, is tapping into the crypto market with a deal to lend its trading technology to a digital currency trading space.
The US-based financial group said on Thursday that it would partner with Pure Digital, a start-up that could be Bitcoin’s core institutional platform.
The new trading venue will provide investors with cash cryptocurrency trading through their existing banking relationships, with State Street’s Cranex platform providing the underlying technology. The event is set to go live in “mid-2021,” the asset manager said.
David News, head of execution services at GlobalLink at State Street Global Markets, said the technology from the currency trading platform Karenex would “translate perfectly into the digital arena”.
The authentic digital platform was founded by Campbell Adams, a currency market veteran who created a foreign exchange venue in 2014 with the help of a consortium of a dozen banks.
“Banks are telling us that they cannot ignore client demand for crypto assets and that they understand that they need to get into a market,” said Lauren Kelly, CEO of Pure Digital.
The decision by State Street came less than a week before a larger cryptocurrency exchange, Coinbase, went public through a direct listing. The group said Earlier this week At the end of its first quarter, it had 56 million verified users performing 1 million transactions per month. Quarterly trading volume was 5 335bn.
The planned launch of the authentic digital venue is the latest in a series of announcements by large financial firms exploring cryptocurrencies and taking adventurous steps to play a greater role in the cryptocurrency market.
Northern Trust and Standard Chartered formed a partnership in December to provide cryptocurrency custody services through a UK-based organization. Bank of New York Mellon followed suit in February by announcing it would provide crypto custody services to clients, with Goldman Sachs re-launching its digital asset business desk.
In mid-March, Morgan Stanley became the first wealthy U.S. bank to give its wealthy personal clients access to three bitcoin funds.
“Large asset managers want to be involved in the cash cryptocurrency market and banks want to act as conduit. We hope to bring the two sides together, “said Adams.
Nevertheless, many banks remain cautious about the cryptocurrency industry despite the higher returns generated by Bitcoin. The value of digital assets rose nearly 300 percent last year and has nearly doubled in value since the beginning of 2021. Bitcoin was trading at $ 57,000 on Thursday.