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State Street (STT) Partners Taurus, Boosts Crypto Service

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State Street Corp. (STT - Free Report) has entered into a strategic partnership with Taurus SA (“Taurus”) to enhance its digital asset solutions by delivering reliable digital asset capabilities to State Street Bank and Trust Company clients. The agreement will enable the offering of an integrated business and operating model that aids the digital investment cycle.

Taurus, a Swiss company backed by Credit Suisse and owned by UBS, is one of the top digital asset infrastructure providers addressing the requirements of large financial institutions.
 
Post the receipt of requisite approvals, STT will be able to utilize Taurus’ comprehensive solutions for custody, tokenization and node-management solutions to automate the issuance and servicing of digital assets, such as securities and fund management vehicles, in line with the applicable institutional standards.

Notably, STT will initially focus on the tokenized versions of traditional assets, per a Coindesk report.

Donna Milrod, chief product officer and head of Digital Asset Solutions at State Street, stated, “The collaboration with Taurus underscores our ongoing commitment to further establishing ourselves as leaders in this growing asset class, and this important announcement only enhances our ambition to deliver to our clients an amazing digital asset experience.”

Given the high institutional demand for digital assets to hedge against inflation and avail diversification benefits, State Street aims to offer its clients best-in-class solutions for this emerging space. The company further caters to the institutions’ need for trusted partners like banks to act as their custodians for their crypto assets instead of a crypto exchange or a wallet provider that might have lower security controls.

State Street will utilize three of Taurus’ top-tier products such as Taurus-PROTECT and Taurus-CAPITAL, which simplifies the creation and management of tokenized assets throughout their lifecycle, as well as Taurus-EXPLORER, which offers blockchain connectivity to many different blockchain protocols.

Lamine Brahimi, co-founder and managing partner of Taurus, stated in an interview with Coindesk, “I'm quite sure this partnership with State Street will be a positive signal for the U.S. financial markets in general, which, because of SAB 121, have been lagging those in Europe.”

This move aligns with State Street’s focus on broadening its array of products to cater to client needs and strengthen fee income. This June, the company announced a collaboration with Galaxy Asset Management to introduce investors to the next generation of digital asset-based strategies and enhance their exposure to digital asset space companies. In 2022, it entered into a licensing agreement with London-based Copper.co to develop and launch an institutional-grade digital asset custody product.

Year to date, shares of STT have gained 3.8% compared with the industry’s rise of 19.5%.

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STT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Financial Services Firms Taking Similar Steps

Earlier this month, Morgan Stanley (MS - Free Report) launched bitcoin exchange-traded funds through its advisors to cater to wealthy clients' demands for the product, per a CNBC report.

According to the people familiar with the matter, MS enabled more than 15,000 of its financial advisors to sell shares of BlackRock’s IBIT and Fidelity’s FBTC. Clients must have a net worth of a minimum of $1.5 million.

Similarly, per a Bloomberg report, Robinhood Markets, Inc. (HOOD - Free Report) plans to offer cryptocurrency futures in the United States and Europe in the near future.

Per the individuals familiar with the matter, once HOOD completes its previously announced acquisition of Bitstamp Ltd. for $200 million next year, the trading platform will likely use the crypto exchange’s licenses to offer perpetual futures for Bitcoin and other tokens in Europe.

Also, HOOD intends to launch CME-based futures in the United States for Bitcoin and Ether.


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