State Street, one of the world’s largest asset managers, is tiptoeing into the cryptocurrency market with a deal to bring its trading technology to a digital currency trading platform.
The American financial group said Thursday it will partner with Pure Digital, a startup that aims to become the main institutional platform for Bitcoin.
The new marketplace will offer investors cryptocurrency trading for cash through their existing banking relationships, while the State Street Currenex platform will provide the underlying technology. According to the asset manager, the facility will be launched in “mid-2021”.
David Newnes, GlobalLink Chief Execution Officer at State Street Global Markets, said Currenex’s currency trading platform technology is “perfect for the digital arena.”
The Pure Digital platform was founded by Campbell Adams, a veteran of the foreign exchange markets who created a currency exchange platform in 2014 with the support of a consortium of a dozen banks.
“Banks tell us that they cannot ignore customer demand for crypto assets, and they understand that this is the market they need to enter,” said Lauren Keely, CEO of Pure Digital.
State Street’s decision was made less than a week before Coinbase, one of the largest cryptocurrency exchanges, went public via direct listing. Earlier this week, the group reported that it had 56 million verified users at the end of the first quarter, with an average of 6.1 million performing transactions per month. The quarterly trading volume was $ 335 billion.
The planned launch of Pure Digital is the latest in a string of announcements from major financial companies exploring cryptocurrencies and taking preliminary steps to play a more significant role in the cryptocurrency markets.
In December, Northern Trust and Standard Chartered partnered to offer crypto custody services through a UK-based company. Bank of New York Mellon followed suit in February, announcing that it would offer cryptocurrency custody services to clients, and Goldman Sachs relaunched its digital asset trading platform.
In mid-March, Morgan Stanley became the first major US bank to offer its wealthy private clients access to three bitcoin funds.
“Large asset managers want to participate in the cryptocurrency cash markets and banks want to act as intermediaries. We hope to bring both sides closer together, ”said Adams.
However, many banks are still wary of the cryptocurrency industry despite the high profits that Bitcoin brings. The price of a digital asset has risen by about 300 percent in the past year, and its value has nearly doubled since the beginning of 2021. Bitcoin traded at $ 57,000 on Thursday.