America's 2nd Oldest Bank Building Bitcoin Trading Platform

Key Takeaways

  • State Street’s Currenex will help Pure Digital build a cryptocurrency trading platform. It’s due to launch in 2021.
  • State Street has plans to “explore” crypto space and may begin trading on the platform.
  • The bank joins BNY Mellon, Morgan Stanley and others in making a move towards adopting crypto.

The United States’ second-oldest bank, State Street, is just the latest to join the crypto boom. 

State Street Makes Crypto Play 

The company’s trading technology provider, Currenex, will be providing infrastructure for a new crypto trading platform called Pure Digital. 

According to the press release, Pure Digital “will be a fully automated, high throughput OTC market for digital assets and cryptocurrencies with physical delivery and bank custody.” It’s set to launch in mid-2021. 

David Newns, Global Head of Execution Services for GlobalLink, State Street Global Markets, said of the update: 

“Currenex is thrilled to leverage our experience and expertise in the FX and digital asset trading marketplace to provide Pure Digital with robust technology and infrastructure for this exciting digital currency trading initiative.” 

Pure Digital will be multi-custodial, and there’ll be a “smart custody routing mechanism” for those who opt to trust the platform with their crypto. 

Many crypto services such as Coinbase target institutional investors with custody solutions. The custodial and Over-the-Counter offering suggests that Pure Digital will primarily focus on the institutional market rather than retail. 

“Institutional participants will trade on the platform utilizing bilateral credit enabling efficient capital utilization and control for all trading participants,” the statement from State Street said. 

Institutional Shake-Up

Institutions will be able to use bilateral credit, something Bitcoin veteran Caitlin Long raised concerns about. “BEWARE: FRACTIONAL RESERVE BITCOIN IOUs coming,” she wrote on Twitter today. “Won’t end well for the banks.” Bilateral credit involves two organizations, usually banks, extending their credit limit with one another over a set time period. This allows one bank to borrow more than the credit limit since the second bank still has a debt to pay them.

The announcement also suggests that State Street is taking a long-term view on the crypto space. Campbell Adams, the founder of Pure Digital, said that the two companies “share the same vision for the future of the digital currency market.” The release notes suggest that they have plans to “further explore” the space. 

It’s not yet clear to what degree State Street will be involved in the platform, but the focus on institutions suggests that it could commence trading and custodial services. 

State Street wouldn’t be the first major institution to adopt crypto. BNY Mellon announced it would be launching a crypto custody service in February, while the 169-year-old insurance firm MassMutual made a $100 million Bitcoin purchase towards the end of last year.

Most recently, Morgan Stanley and Goldman Sachs have shared their plans to offer Bitcoin to wealthy clients. 

State Street manages over $3 trillion in assets. 

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Source: Read Full Article