State Street’s managing director for digital product development Jay Biancamano suggested that the world’s largest custody bank could move into digital assets “very quickly” during the most recent episode of Fortune’s “Balancing the Ledger.”
We should be prepared to move in that direction if our clients want to invest in those assets”
He also expects a Bitcoin ETF to be approved within the next few years.
Moving beyond Bitcoin
Jay Biancamano says they are not focused on cryptocurrencies, such as Bitcoin and Litecoin. Instead, State Street wants to see the bigger picture.
Everyone talks about cryptocurrencies, but even illiquid assets like real estate are now being tokenized on a Blockchain. Thus, investors will be able to diversify their portfolios.
If you look at 30 years ago when assets moved from materialization to dematerialization—where we moved from coupon clippings and stock certificates to electronification—we believe the same thing is going to happen with digital assets."
Biancamano is certain that Blockchain will be able to democratize real estate and make transactions much faster (it currently takes up to ten days to settle a deal).
Cryptocurrency custody has turned into a rapidly growing business niche with Coinbase alone storing about five percent of all BTC in circulation.
State Street holds about $30 trln worth of assets, and the new tokenization trend will allow them to increase that number, according to Biancamano.
I think assets under management will increase, and I think that’s the unique opportunity for us.”
When asked about the chances of a Bitcoin ETF being approved by the SEC during the next few years, Biancamano had a very short answer: “Absolutely.” He later added that there are regulatory and custody issues that need to be hammered out.
I think you have to have the same regulatory clarification, and the same risk assessment that regulators want”
As reported by U.Today, Bitwise is expected to hear its verdict from the regulator this month.