When it comes to US custodian banks, they don’t get much bigger than State Street.
So when the Boston-based giant says it’s going “super gung-ho” on a new trend, you know it’s worth paying attention.
Nadine Chakar, State Street’s head of digital assets, said Financial news she’s going all-in on tokenization, the distinctly unsexy part of crypto that banks are getting into bananas for right now.
In an exclusive interview, Chakar said about 80% of projects within the bank’s digital assets unit involve tokenization, which she believes has the potential to “change everything we do.”
Tokenization is the process of moving pretty much any agreement or asset to the blockchain. The financial world likes it because it cuts out the middle man – and subsequent fees – potentially saving huge amounts of time and money in the long run.
State Street launched its digital asset arm last year, and it currently has 400 people.
As for the crypto investment itself? “Not on the cards,” Chakar said, adding that even blue-chip tokens like bitcoin are too volatile and unregulated for the bank to get involved right now.
“Customers have trusted us with their assets for the last 70 or 80 years, and we’re not going to do anything to jeopardize that reputation,” Chakar said.
If you feel a sense of deja vu, that’s because the head of BNP Paribas Asset Management, Sandro Pierri, said something very similar in September. And judging by his comments back in August, Abrdn CEO Stephen Bird feels much the same way.
Three is a crowd, right?
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Taking MiCA
The Financial Conduct Authority may still be in the early stages of drafting a framework of rules for crypto in the UK. But over in Europe it’s a different story.
Last month, the European Parliament concluded talks on the European Commission’s landmark proposal for a regulation on markets for crypto-assets, also known as MiCA.
Now the European Banking Authority’s chief, José Manuel Campa, has written in the UN to explain why MiCA – which is expected to enter into force in 2023 – should be seen as “the beginning, not the end, of work” on crypto regulation in the bloc.
The Paris-based regulator, which was formed in the wake of the financial crisis to ensure European banks are resilient enough to absorb future shocks, oversees the largest tokens in digital assets under the MiCA framework.
Campa writes that once the rules come in, Europe’s financial police will step up their enforcement actions to “root out illegal or unscrupulous practices in the crypto-asset market”.
It all sounds very exciting – unless you’re a crypto-swindler, of course…
Our favorite stories from around the web
Speaking of the financial police, a Mexican art collector has provoked local authorities — and left art lovers horrified — after claiming to have set fire to a Frida Kahlo drawing to promote 10,000 non-fungible tokens he made from the work, reports Vice. Given the cultural significance of the work, he is now under investigation.
Elon Musk wanted to take Twitter onto the blockchain and get people to pay a small amount for each tweet, according to texts released as part of the lawsuit against the Tesla chief following his failed takeover bid, reports Time. Here is the full document, for those who have too much time on their hands.#
Monzo is to give its lowest-income workers a £1,000 payment to help with the cost of living crisis. TS Anil, the bank’s managing director, told LinkedIn News: “We’re constantly assessing the situation to make sure we’re doing what we can.”
Finally, partnering with an F1 team has become a status symbol for crypto firms – but the recent Singapore Grand Prix was a much more subdued affair. Bloomberg reports on why that was.
Last word: Gensler makes Kim K pay
On October 3, US regulators fined Kim Kardashian $1.26 million for mentioning cryptocurrency on Instagram without admitting she was paid to do so.
The announcement came alongside a video of a triumphant Gary Gensler explaining why celebrities should be wary of involvement with crypto ads. The head of the Securities and Exchange Commission said: “This case is a reminder that when celebrities/influencers endorse investment missions, including crypto-asset securities, it does not mean that these investment products are right for all investors.”
But the announcement also came with the news that Kim K was paid a whopping $250,000 for the post, which promoted a cryptocurrency.
That means the affected reality TV star will have made her money back — and then some — by making just six Instagram posts.
Which sounds suspiciously like we’re all in the wrong jobs.
To contact the author of this story with feedback or news, email Alex Daniel
