Per the announcement, the pilot program will test the reporting scenarios for the user’s crypto holdings with Gemini Custody. The Boston-headquartered company will initially test the scenarios for only two digital currencies; however, it has plans to add more cryptos as well.
Commenting on the prospect, Ralph Achkar, managing director of digital product development and innovation at State Street, said: “We want to evolve our business with our clients’ needs. The digital asset space is still nascent, yet it promises opportunities that could fundamentally impact how we do things in the future.”
“There is small, but growing demand from our clients for solutions of this type and many technical, operational, regulatory, and legal considerations to be addressed. That is why we have opted for an open model, and started a pilot with Gemini as an established, regulated player in the digital asset space.”
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Institutional interest in digital assets
Compared to the mainstream financial sectors, the digital asset is still in the nascent stage, which is keeping institutional investors away from the sector. A recent report by Crypto Fund Research revealed that as many as 70 crypto-focused hedge funds were closed this year due to less institutional demand in the market.
On the contrary, State Street, earlier this month, revealed that 38 percent of its client base showed interest in increasing digital asset holdings next year.
“Given State Street’s leadership position in asset servicing, this project felt like a natural extension of those services as we continue to explore and evaluate opportunities to provide innovative solutions to our clients,” Achkar added.
“Working with State Street is a major milestone for Gemini and digital assets as a mainstream asset class. With trillions of dollars in assets under management, State Street will never compromise on security — and neither will we…Traditional investors will more seamlessly be able to allocate capital in their portfolio to digital assets through trusted and regulated financial institutions — helping us build a better bridge to the future of money,” Tyler Winklevoss, CEO of Gemini, said.