Even though State Street is one of the largest institutional custodial services, the company has announced that it is not in a hurry to launch a service for securing bitcoin wallet. This is mainly because the service’s clients have not started making demand for their digital currenckies to be safeguarded.
Jay Biancamano, the company’s managing director for digital product development and innovation, however said that interest in the custodial service for cryptocurrencies is high though.
Biancamano who spoke during the Banker BlockFS conference in New York on Thursday said,
“There is no sense of urgency on the part of our clients to move into these assets right now. When they do, we want to meet them there,”
He maintained that even though clients are interested in the service, that they are yet to start making demands for it.
“There is a very high level of interest but no need to move because currently none of our clients are looking for us to house these assets in custody.”
Institutional custodial services has been cited by investment experts as one of the missing links in the quest to attract institutional investors to the crypto industry aside appropriate regulatory guidelines.
Fidelity investments is one of the big players that is expected to get involved in the institutional custodial services, expectations which has made the Wall street eager to see how things turn out in the industry.
Other players that are already established their presence in the space are Coinbase and BitGo which have been licensed to operate and start securing bitcoin wallets and those of of other digital currencies.
Big companies that are known in traditional custodial space such as Northern Trust and Japanese bank Nomura have shown interest in the digital currency custodial space also.
It is not yet clear the approach State Street plans to use in its entry into the custodial market. Options available for the company include acquisition or building its own secure platform from ground up.
“We follow our clients’ assets,” Biancamano remarked. “We do talk to our clients who are interested in doing this and we are looking at this very closely. But we are not putting a sign that we are opening for business. That said, we are a blockchain-friendly firm; we are very involved in the vertical.”
The State Street spokesman also said that the SEC has been engaging players in the quest to keep abreast of the happenings in the custodial space of cryptocurrency apparently to help the agency map out appropriate rules for custodial services.
On the subject of how regulation will coalesce around custody solutions for crypto assets, Biancamano said the SEC has been engaging traditional providers to better understand the current state-of-play, which he called “refreshing”.
Alluding to an inevitable convergence with State Street’s custody business at some point in the future, he added:
“It’s not just about the current cryptocurrency; it’s also about tokenization and digitalization of traditional assets too.”