State Street Corporation to Launch Stablecoin and Deposit Token to Improve Cross-Border Payment Settlements Through Blockchain

State Street is actively looking for ways to get involved in blockchain payment services. One of them is to issue a stablecoin, a cryptocurrency that is pegged to an asset such as the US dollar.

Boston-based financial services company State Street Corporation (NYSE:STT) is set to launch a stablecoin and a deposit token, in a bid to enhance cross-border payment settlements using blockchain technology, Bloomberg reported.

State Street has been actively exploring avenues to participate in blockchain payment services. One of the initiatives involves issuing a stablecoin, a type of cryptocurrency that is pegged to an asset like the US dollar.

Additionally, the company is planning to launch a deposit token that tracks customers’ deposits on the blockchain. These efforts are part of State Street's broader strategy to offer digital asset services to its clients, the report noted.

The financial services company is also considering joining digital-cash consortiums and enabling settlement through its investment in Fnality, a blockchain payments firm that is eyeing the US market.

While it is unclear whether the developments are positive or negative, State Street's continuous involvement in the blockchain space highlights its aspiration to enhance digital asset servicing.

Over the past year, State Street has gradually integrated digital assets into its business model. Earlier this year, the company merged its digital asset team with its finance team.

As the third-largest ETF manager, State Street offers fund administration and accounting services to crypto ETFs. The company has played a role in launching digital asset ETFs in partnership with Galaxy Asset Management, bolstering its presence in the digital asset market.

It is worth noting that introducing a deposit token would require approval from US banking regulators, underscoring the challenges in integrating blockchain technology into the existing financial system.

Meanwhile, stablecoins face the hurdle of lacking federal regulation in the US. Currently, Reps. Maxine Waters and Patrick McHenry are drafting a bill to regulate stablecoins, while the Senate is also working on legislation in this area.

The SEC recently concluded its probe into Paxos over the Binance USD stablecoin, and this month, Paxos received approval to issue stablecoins in Singapore, hinting at potential for deeper integration.

Also Read: Galaxy, State Street Partner To Unveil Next-Gen Crypto Trading Products

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