17 Jul, 2024
State Street Looks to Create Its Own Stablecoin
Quick Take
State Street is looking for ways to get involved in settling payments on the blockchain and is also considering creating a deposit token, Bloomberg reported.
State Street has delved into crypto in the past. In 2021, the firm set up a new unit to focus on digital assets.
State Street Looks to Create Its Own Stablecoin
State Street Corp. is looking into creating a stablecoin, Bloomberg reported on Wednesday.
The global financial services firm is looking for ways to get involved in settling payments on the blockchain and is also considering creating its own deposit token. The deposit token would signify customer deposits on a blockchain, according to an anonymous source cited by Bloomberg.
This wouldn't be the first time the country's 12th-largest bank delved into crypto. State Street Global Advisors partnered with Galaxy Asset Management last month to launch exchange-traded funds that provide exposure to crypto firms. State Street also built a new unit in 2021 within the firm focused on digital assets, tokenization and crypto.
State Street did not immediately respond to a request for comment from The Block on its stablecoin plans.
Other companies have launched stablecoins. Last year, PayPal launched its dollar stablecoin with Paxos, PayPal USD or PYUSD.
There is no federal framework in place for regulating stablecoins in the U.S. Reps. Maxine Waters, D-Calif., and Patrick McHenry, R-N.C., have been working on a bill to regulate stablecoins on the federal level. However, one challenge has been who should be the primary regulator for stablecoin issuers. Work is also underway on the Senate side to regulate stablecoins.
U.S. Securities and Exchange Commission Chair Gary Gensler has previously compared stablecoins to other securities, such as money market funds. However, his agency dropped an investigation into Paxos over the stablecoin Binance USD last week. In a statement on July 11, Paxos said the SEC's move will "unlock a new wave of stablecoin adoption by leading global enterprises."