Tokenization is quickly moving from theory to execution across Wall Street, and some of the world’s largest financial institutions no longer want to sit on the sidelines. One of them is now preparing to turn blockchain infrastructure into actual investable products.
State Street Corp., long known for its behind-the-scenes role in global finance, is stepping into a more active position in digital assets. Instead of focusing solely on administration and accounting, the firm is building a platform that will allow traditional investment products and cash instruments to exist in tokenized form.
Key Takeaways
- State Street is shifting from crypto support services to creating tokenized funds and digital cash products.
- The move reflects growing institutional confidence in tokenization as core financial infrastructure.
- Custody for tokenized assets could follow later, depending on regulation.
The plan includes blockchain-based versions of money-market funds and exchange-traded funds, as well as digital cash instruments such as tokenized deposits. Stablecoins are also being evaluated as part of the broader framework.
From servicing crypto to creating it
Until now, State Street’s exposure to crypto largely involved supporting clients that already held digital assets or crypto-linked ETFs. This new initiative marks a clear break from that model. The firm intends to work directly with institutional clients, external asset managers, and its own investment arm to design products rather than simply process them.
That shift reflects a belief that tokenization will become a core layer of financial markets, not just an add-on service.
Early partnerships signal direction
State Street has already begun testing this approach. Last month, it partnered with Galaxy Digital, founded by Michael Novogratz, to launch a tokenized fund. The collaboration highlighted how traditional financial infrastructure and crypto-native expertise can intersect to create new types of investment vehicles.
Joerg Ambrosius, president of investment services, described the broader rollout as a key milestone in the firm’s long-term digital asset strategy.
A friendlier climate accelerates adoption
The renewed push comes as sentiment around digital assets shifts in Washington. Support for crypto and tokenization from President Donald Trump, combined with a more constructive regulatory tone, has reduced the hesitation that once kept large banks at arm’s length from blockchain-based products.
As a result, tokenization is increasingly viewed as a way to modernize settlement, liquidity, and transparency rather than as a speculative experiment.
Industry momentum builds
State Street’s move mirrors a broader trend. Rival custodian Bank of New York Mellon Corp. has rolled out tokenized deposit services, while asset managers such as Franklin Resources Inc., Fidelity Investments, and JPMorgan Chase & Co. have launched tokenized money-market funds. Even traditionally conservative firms like T Rowe Price Group Inc. are now building crypto-focused offerings.
These moves suggest tokenization is becoming part of mainstream portfolio infrastructure rather than a niche innovation.
What’s still on the roadmap
With roughly $51.7 trillion in assets under supervision, State Street has significant leverage in shaping how tokenized products are adopted by institutions. While custody for tokenized assets is not part of the initial rollout, the firm has left the door open to adding those services later as regulations evolve.
For now, State Street’s message is straightforward: tokenization is no longer something it merely supports for others. It’s something the firm intends to build, scale, and integrate into the core of institutional finance.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/state-street-launches-tokenized-funds-and-digital-cash-products/